The use of administrative data from the German Taxpayer-Panel (TPP) offers interesting insights into the development of income distribution in Germany. In contrast to survey data such as the German Socio-economic Panel, the TPP indicates a close relationship between inequality changes and the evolution of corporate and investment income over the business cycle. Our findings strongly suggest complementing the examination of survey data with analyses on the basis of administrative tax data. This not only allows a better understanding of the historical evolution of income inequality but also enables a more reliable assessment of the future evolution of income distribution in Germany.
Drechsel-Grau, Moritz, Andreas Peichl and Kai Daniel Schmid (2015), Einkommensverteilung und gesamtwirtschaftliche Entwicklung in Deutschland: Spitzeneinkommen – ein Missing-Link, Wirtschaftsdienst 95 (10), 684-688. Download