Recent studies have documented the growth of earnings inequality in the United States during the 1980s. In contrast to these studies' findings, our analysis of micro data for the former West Germany yields virtually no evidence of growth in earnings inequality over the same period. Between 1978 and 1988, a reduction in the dispersion of earnings among workers in the bottom half of the earnings distribution led to a narrowing of the overall dispersion of earnings in Germany.
Earnings Inequality in GermanyKatharine G. Abraham and S.N. Houseman ,
Differences and Changes in Wage Structures, ed. by R.B. Freeman and L.F. Katz, University of Chicago Press