Germany's richest 10 percent owns two-thirds of its wealth

Germany's richest 10 percent owns two-thirds of its wealth

Germany's richest 10 percent owns two-thirds of its wealth

Wealth inequality in Germany - which is already high - has been significantly underestimated, according to a new study. The richest 10 percent of the German population owns around two thirds of its net wealth.

Distribution of wealth more uneven than previously believed

Wealth in Germany is distributed much more unevenly than previously thought. This is the finding of a new study by the German Institute for Economic Research (DIW), which found that the wealthiest one percent of the population owns 35 percent of Germany’s net assets - not 22 percent, as previously assumed. 

The study also found that previous estimates that the top 10 percent own 59 percent of the country’s wealth is incorrect - the real figure is somewhere around 66 percent. No one in the bottom 50 percent of the population has a net worth of more than 22.800 euros; the average net worth for this half the population is 3.700 euros. 

Gini coefficient in Germany is 0,81

The study also found that the so-called Gini coefficient - an internationally-accepted measure of inequality - is higher in Germany than previously thought. If the coefficient is at zero, all households in a society have an equal income. If it is 1, the country’s entire income goes to a single household, while everybody else gets nothing. In Germany, the Gini coefficient is currently 0,81, rather than 0,78 as previously estimated. 

“Germany’s already high wealth inequality has been significantly underestimated,” said Johannes König, one of the authors of the study. “For the first time, we are now seeing a more realistic picture of the distribution at the top.” 

Study created new sample of millionaires in Germany

In order to shed more light on the assets of the wealthy, the research team had to take a different approach. Since the introduction of flat-rate taxation in 2009 and the suspension of property tax in 1997, large assets have been poorly recorded in Germany. And since the number of people with assets reaching into the millions is so small, it is unlikely that they would appear in the random samples used for large population surveys. 

The researchers therefore turned to company shareholders and corporate property databases, which enabled them to put together a list of 1,7 million people in Germany with substantial assets. They selected a random sample for interviewing and eventually spoke to 1.956 households, 881 of which had a net worth of more than one million euros. 

Millionaires in Germany: older men in the west

They found that this group included an above-average number of men (69 percent), with an average age of 56 years - older than the average German. They are better educated than the average population and predominantly live in western Germany. With average earnings exceeding 7.600 euros a month, they also earn three times more than the average salary. Only 14 percent had a migration background.

However, the findings also go against some commonly-accepted prejudices. “The idea that rich people are privateers who do not work and consume their money cannot be confirmed in our data,” said Carsten Schröder, who also worked on the study.

Around three quarters of the millionaires in Germany are self-employed. Around a third are retired and only five percent do not work at all. The millionaires also keep longer working hours. According to the survey data, they work an average of 47 hours a week - around 10 hours more than the rest of the population. 



Abi Carter

Abi studied History & German at the University of Manchester. She has since worked as a writer, editor and content marketeer, but still has a soft spot for museums, castles...

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