Despite similar increases in income inequality in Germany and the USA, this polarization only came along with an increase in the poverty rate in the German case. Meanwhile, the poverty rate in the United States has been mostly stagnating for the last twenty years with the exception of the aftermath of the Great Recession. The project investigates the role of possible determinants through developments in transfers and taxes, the labor market and household structures. On the basis of novel analysis methods, we aim to explain how these factors and their interplay explain why both countries have witnessed a sharp increase in income inequality that only led to increasing poverty rates in Germany.
This project is funded by the Elite Program for Postdoctoral Researchers of the Baden-Wuerttemberg Foundation.