inequality
Big differences in wealth between East and West
In Germany, wealth is distributed very unevenly. There is also still a major imbalance between East Germans and West Germans. This has various reasons.
In Germany, wealth has been increasing for years, but it is still unequally distributed, especially between East and West Germany. This emerges from the social report 2024, which the Federal Statistical Office published with the Berlin Science Center for Social Research (WZB) and the Federal Institute for Population Research (BiB).
Above all, the sharp rise in real estate prices has caused a significant increase in household net assets in recent years. Between 2010/11 and 2021, the wealth of households in Germany increased by an average of 62 percent – from 195,200 euros to 316,500 euros. Taking inflation into account, the increase remains at 39 percent.
However, East German households had significantly lower assets, with an average of 150,900 euros, than West German households with 359,800 euros. Net assets consist of all tangible and financial assets less existing loans and other liabilities.
Where do the differences come from?
According to WZB expert Philip Wotschack, the reasons for the imbalance between East and West lie, on the one hand, in the continued lower wage levels in East Germany, which make it more difficult to build up wealth. The real estate market in the east shows no or lower increases in value due to the population decline.
Wotschak sees the third reason as the historically very limited opportunities for private wealth accumulation in the GDR. Business assets were not desirable and stock and financial investments were not possible. Private real estate ownership was only slightly widespread.
From a national perspective, wealth is also very unevenly distributed: in 2021, the top ten percent of households had 56 percent of the total wealth. According to the report, Germany is one of the leaders in Europe when it comes to inequality. Only in Estonia is wealth distributed even more unequally. The top ten percent own 59 percent of the total assets.
According to the report, an important reason why wealth differences in Germany persist across generations is gifts and inheritances.
dpa
Source: Stern
I have been working in the news industry for over 6 years, first as a reporter and now as an editor. I have covered politics extensively, and my work has appeared in major newspapers and online news outlets around the world. In addition to my writing, I also contribute regularly to 24 Hours World.
