ECONtribute study: Germany - Wealth and inequality rising hand in hand


The gap between rich and poor is widening more and more: This is the conclusion of a new study by the Cluster of Excellence ECONtribute around a research team led by Bonn economist Prof. Dr. Moritz Schularick. Since reunification, the upper middle class has become significantly richer – while the poor have remained poor. Since 1993, the richest 50 percent of Germans have been able to double their wealth, whereas the wealth of households in the bottom 50% has barely grown at all. As a result, the share of total wealth owned by the bottom 50% has nearly halved since 1993.

This development was driven in particular by the equity and real estate boom, which meant that anyone who owns a house, an apartment or other assets – and previously had enough wealth on the side to afford them – has been able to profit from the rising prices over the past decade. This development has almost by-passed households in the lower wealth strata.

French economist Thomas Piketty, professor at the Paris School of Economics, commented on the study in Berlin: “It shows that wealth inequality remains extremely high, and has increased since the 1990s. The limited access to property and economic participation of the bottom half of the population, together with the large concentration of wealth and economic power at the top, should be a concern for Germany and Europe at large.”

The disparity between rich and poor is supported by further figures: While in 1993 the top ten percent of households were on average 50 times richer than the bottom 50 percent, this figure has also doubled by 2018.

“Intelligent and well thought-out public policy requires a solid analysis of the current situation,” praised Federal Finance Minister Olaf Scholz on Thursday. “With the first comprehensive long-term study on the development of wealth disparity in Germany, Moritz Schularick and his co-authors are making an important contribution to the economic and socio-political debate. Social cohesion can only succeed if everyone participates in the growth and success of our society.”

Current statistics also undervalue the total assets of German households. Especially the many corporations and quasi-corporations are statistically underestimated significantly in Germany. “If you apply international valuation methods, we see that German business assets amounted to around four trillion euros in 2018 and real estate assets to more than nine trillion euros. This means that German business assets have been undervalued by up to two trillion euros,” says study author Schularick, explaining the results.

From left to right: Olaf Scholz, Federal Minister of Finance , Prof. Thomas Piketty, Paris School of Economics, Prof. Moritz Schularick, University of Bonn & ECONtribute, Sarah Ryglewski, parlimentary state secrety in the Federal Ministry of Finance. Copyright: phototek, Xander Heinl

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Katrin Tholen
ECONtribute: Markets & Public Policy

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Prof. Dr. Moritz Schularick
University of Bonn