Wealth distribution in Switzerland and Germany: Evidence from Survey Data

• Applicant: Dr. Markus M. Grabka
• Subject Area: Empirical Social Research
• Term: from 2016 to 2020
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 313480214

The issue of wealth distribution has received increasing attention over the past years, both within social sciences research and the broader public. Besides the issue of wealth inequality, wealth is a key resource in modern societies and a central dimension of economic and subjective well-being (SWB). There is however a stricking lack of research based on survey and micro data, particularly in Switzerland, where research on wealth relied so far almost uniquely on tax records. The new availability of survey data in Switzerland including wealth information (notably CH-SILC, Swiss Household Panel (SHP), CH-SHARE) provides the opportunity for an in-depth analysis and for assessing the quality and the limits of the different survey data. The central aims of this D-A-CH project are (1) to assess the quality of survey data on wealth, (2) to document the relevance of pension entitlements, (3) to study the impact of migration and life events on wealth and wealth mobility, and (4) to analyse the impact of wealth on SWB. Adopting a comparative approach, we focus on Germany and Switzerland. More precisely, the proposed project consists of four research axes: Axis 1 deals with the quality of wealth data comparing different surveys in Switzerland. The remaining axes compare Germany and Switzerland. Axis 2 assesses the impact of pension entitlements on the wealth distribution, the third axis investigates the role of life-events and migration on distribution of wealth and on wealth mobility, whereas the axis 4 examines the impact of different wealth components on the dimensions of SWB. Comparative analyses will mostly rely on data from the German Socio-Economic Panel study (SOEP), SHP and CH-SILC. The German team will take the lead for Axis 2, the Swiss team for Axes 1 and 4, while Axis 3 will be carried out in close cooperation. The research of the proposed D-A-CH project is original in four respects: First, this project proposes a novel comparative perspective for wealh issues. Germany and Switzerland have many similarities (low share of house owners, economic evolution) which facilitates studying the impact of key differences (migration, tax scheme). Second, this project compares different Swiss surveys on wealth evaluating their validity, reliability and consistency. Third, the project will provide empirical evidence to what extent the highely unequal wealth distribution in Switzerland and Germany can be attributed to the ignorance of pension entitlements in previous research. Fourth, the chance to have longitudinal panel data in both countries offers interesting opportunities, in particular to study wealth mobility, the effect of life events and a better treatment of causaility and endogeneity.This D-A-CH-project brings synergies by combining competences and knowledge of the two teams. Summing up, it will contribute to a more precise measurement of wealth in rich countries and to a better understanding of the distribution and dynamics of wealth.

• DFG Programme: Research Grants
• International Connection: Switzerland
• Cooperation Partner: Professor Dr. Christian Suter
• Co-Investigator: Dr. Ursina Kuhn