Women's Labour Market Attachment and the Gender Wealth Gap

Abstract

This article examines the evolution of the gender wealth gap in Germany during the first decade of the XXI century. This period is characterized by an increase in labour supply of women and change in occupational structure due to numerous reforms undertaken by the government. We use the Firpo, Fortin, Lemieux detailed decomposition technique throughout the wealth distribution to identify the main factors explaining the gap over time. Findings indicate that an increase in the labour market participation of women and the resulting changes in the occupational structure are accompanied by positive changes in women's wealth accumulation, which reduce the gender wealth gap. The role of permanent income decreases due to a reduction both in the gender difference in average permanent income and in gender differences in its returns. There remain substantial differences in the way women and men accumulate wealth. Policy interventions to further reduce the gap are discussed.