The Impact of Class on Social Inequality. Winners and Losers of the Income Dynamics in Germany between 1998 and 2005.

Based on the thesis of increasing overall inequality in German society, this paper discusses changes in the inequality of wages during the period of the social democratic-led government between 1998 and 2005. For the empirical analysis, data from the German Socio-Economic Panel (GSOEP) are used. The main goal of the analyses is to identify the differences in the growth of real wages of various social classes. Empirically, the results show that the inequality of real wages increased between 1998 and 2005. This increase is due to the negative growth of lower-level wages and a corresponding increase in median and higher-level wages. A more detailed look at the wage differences with respect to the individual social class position reveals that the differentiation between social classes has widened over the period in question, leaving the lower classes as losers of the recent wage dynamics in the German labour market. Besides increasing inter-class wage differentials, there was also a slight increase in the intra-class component, pointing to a growing differentiation within social classes. [ABSTRACT FROM AUTHOR]