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Income inequality rose in Germany since the 1970s. To quantify the impact of different socio-economic trends on inequality, the author constructs counterfactual distributions of net household income with rich German data from the Microcensus in 1976 and 2011. The procedure allows to study the effect of marital sorting in education and includes indirect effects such as the influence of education on employment. When comparing the income distribution in West Germany for 1976 and 2011, the author finds that the prevalence of singlehood accounts to a large extent for the observed increase in inequality. The inequality increase is also associated with a change of employment among males and single females. When comparing West and East Germany in 2011, the author finds that the stronger labour market attachment of East German married females combined with the high East German unemployment produces even more income inequality than the West German employment structure. Moreover, the smaller household size boosts inequality in East Germany, whereas education works against it. In both comparisons, the author finds no significant impact of positive assortative mating in education or ageing.

This paper addresses the perceived closeness of the relation between East and West German adult children and their parents who no longer live in the same household. The empirical analyses are based on the German Socio‐Economic Panel (GSOEP). They show that East German family relations are closer than West German relations. Regarding the causes for closer or weaker relations for East and West Germans there are both similarities and differences. For example, the empirical analyses indicate differences regarding the importance of standard of living, birth cohort, and religion.

A proposed explanation for why business creation is often found to increase in recessions is that there are two components to entrepreneurship – “opportunity” and “necessity” – the latter of which is mostly counter-cyclical. Although there is some agreement on the conceptual distinction between these two factors driving entrepreneurship, there is little consensus in the literature on empirical definitions. The goal of this chapter is to propose an operational definition of opportunity versus necessity entrepreneurship based on the entrepreneur's prior work status (i.e., based on previous unemployment) that is straightforward, based on objective information, and empirically feasible using many large, nationally representative datasets. We then explore the validity of the definitions with theory and empirical evidence. Using datasets from the United States and Germany, we find that 80–90% of entrepreneurs are opportunity entrepreneurs. Applying our proposed definitions, we document that opportunity entrepreneurship is generally pro-cyclical and necessity entrepreneurship is strongly counter-cyclical both at the national levels and across local economic conditions. We also find that opportunity vs necessity entrepreneurship is associated with the creation of more growth-oriented businesses. The operational definitions of opportunity and necessity entrepreneurship proposed here may be useful for distinguishing between the two types of entrepreneurship in future research.

A growing polarization of society accompanied by an erosion of the middle class is receiving increasing attention in recent German economic and social policy discussion. Our study contributes to this discussion in two ways: First, on a theoretical level we propose extended multidimensional polarization indices based on a constant elasticity of substitution (CES)-type well-being function and present a new measure to multidimensional polarization, the mean minimum polarization gap, 2DGAP. This polarization intensity measure provides transparency with regard to each single attribute, which is important for targeted policies, while at the same time respecting their interdependent relations. Second, in an empirical application, time is incorporated, in addition to the traditional income measure, as a fundamental resource for any activity. In particular, genuine personal leisure time will account for social participation in the sense of social inclusion/exclusion and Amartya Sen’s capability approach.

Instead of arbitrarily choosing the attribute parameters in the CES well-being function, the interdependent relations of time and income are evaluated by the German population. With the German Socio-Economic Panel (GSOEP) and detailed time use diary data from the German Time Use Surveys (GTUSs) 1991/1992 and 2001/2002, we quantify available and extended multidimensional polarization measures as well as our new approach to measuring the polarization of the working poor and affluent in Germany.

There are three prominent empirical results: Genuine personal leisure time in addition to income is an important and significant polarization attribute. Compensation is of economic and statistical significance. The new minimum 2DGAP approach reveals that multidimensional polarization increased in the 1990s in Germany.

Previous studies have used language proficiency, citizenship, labour indicators, educational outcomes and political rights as measures of migrants’ socio-cultural integration. However, little is known about the migrants’ participation in volunteering activities, music concerts, theatrical plays and artistic activities, among others, and how this is compared to the participation of natives, defined as people of German descent and born in Germany. The study aims to investigate and compare the cultural and social involvement between migrants and natives.

The analysis relies on information from the German Socio-Economic Panel Survey (GSOEP). Panel data models, in particular, the random-effects ordered Logit model, are utilised because the investigated outcomes are recorded in frequency and are ordered variables. The authors compare the participation in socio-cultural activities among immigrants of the first, second and 2.5 generations.

The findings indicate that first-generation immigrants are less likely to engage in various socio-cultural activities. However, the 2.5 generation immigrants are more active than the native population, as this generation of immigrants participates more frequently.

The findings highlight the importance of fostering interaction between natives and immigrants in the workplace and the social and cultural realms. Participation in social and cultural activities may increase intercultural awareness and contribute to the eradication of bias and prejudice.

To the best of the authors’ knowledge, this is the first study to use a large panel dataset to compare the participation of natives and migrants in various social and cultural activities. In addition, this is the first study to analyse second and 2.5-generation immigrants.

Long considered the classic coordinated market economy featuring employment security and relatively little employment precarity, the German labor market has undergone profound changes in recent decades. We assess the evidence for a rise in precarious employment in Germany from 1984 to 2013. Using data from the German Socio-Economic Panel through the Luxembourg Income Study, we examine low-wage employment, working poverty, and temporary employment. We also analyze changes in the demographics and the education/skill level of the German labor force. Although employment overall has increased, there has been a simultaneous significant increase in earnings and wage inequality. Moreover, there has been a clear increase in all three measures of precarious employment. The analyses reveal that models including a wide variety of independent variables – demographic, education/skill, job/work characteristics, and region – cannot explain the rise of precarious employment. Instead, we propose institutional change is the most plausible explanation. In addition to reunification and major social policy and labor market reforms, we highlight the dramatic decline of unionization among German workers. We conclude that while there are elements of stability to the German coordinated market economy, Germany increasingly exhibits substantial dualization, liberalization, inequality, and precarity.

The purpose of this paper is to analyse the health level and health dynamics of migrants from Central and Eastern Europe (CEE), broadly defined, in Germany. Population health in CEE compares badly to Germany. Lifestyle changes and access to better health care in Germany can lead to health improvement of migrants.

Longitudinal data from the German Socio-Economic Panel are used. First, the time trends of immigrant and native health are analysed graphically. Second, regression analysis is conducted, controlling for demographic and socio-economic factors when estimating the country of origin effects on health. Finally, regression models are estimated to investigate if social and economic integration significantly improves the subjective well-being of the immigrant groups.

Evidence is found for significantly better subjective health of migrants compared to the natives, even if demographic and socio-economic factors are controlled for. Only part of the health advantage is explained by selective migration. The health of the more advantaged migrants tend to decline slower than of the natives.

If migrants are economically and socially integrated in the host country then their presence is unlikely to increase the health burdens of the host country.

The existing knowledge on the health developments of migrants from CEE in other European countries is limited. Based on richer statistical information, the results of this paper partly contradict earlier findings in the literature, in particular no evidence is seen for worse or quickly declining health of immigrants.

I study state dependence in social assistance receipt in Germany using annual survey data from the German Socio-Economic Panel for the years 1995–2011. There is considerable observed state dependence, with an average persistence rate in benefits of 68 per cent comparing to an average entry rate of just above 3 per cent. To identify a possible structural component, I estimate a series of dynamic random-effects probit models that control for observed and unobserved heterogeneity and endogeneity of initial conditions. I find evidence of substantial structural state dependence in benefit receipt. Estimates suggest that benefit receipt one year ago is associated with an increase in the likelihood of benefit receipt today by a factor of 3.4. This corresponds to an average partial effect of 13 percentage points. Average predicted entry and persistence rates and the absolute level of structural state dependence are higher in Eastern Germany than in Western Germany. I find only little evidence for time variation in state dependence around the years of the Hartz reforms.

The purpose of this paper is to estimate the association between religious affiliation and the rate of return to human capital for German men and women.

This paper employs data from the 1997, 2003, 2007 and 2011 waves of the German Socio-Economic Panel for German men and women in full-time employment between the age of 25 and 54. The association between religious affiliation and wages was estimated using a conventional human capital model.

This paper finds that Catholic men (women) received a wage premium of 4 per cent (3 per cent) relative to their Protestant counterparts, even after controlling for an extensive range of demographic, economic and social characteristics.

The study contributes to the literature by providing – to the best of the authors’ knowledge – the first results on the wage premium received by Catholic men and women in the German labour market.

This chapter investigates whether and to what extent immigrants in Germany are integrated into German society by utilizing a variety of qualitative information and subjective data collected in the 1999 wave of the German Socio-Economic Panel (GSOEP). To this end, leisure-time activities and attitudes of native Germans, ethnic Germans and foreign immigrants of different generations are compared. The empirical results suggest that conditional on observable characteristics the activities and attitudes of foreign immigrants from both generations differ much more from those of native Germans than the activities/attitudes of ethnic Germans. Furthermore, the attitudes of second-generation immigrants tend to be characterized by a larger degree of fatalism, pessimism and self-doubt than those of all other groups, although their activities and participation in societal life resemble more those of native Germans than those of their parents generation.