What are household assets

Asset limits Large group-specific differences

The distribution of wealth is very different within different age groups and household types. A household with a main income earner under the age of 30, for example, was among the wealthiest 10 percent of its age group if it had assets above around 71,300 euros. For main income earners between 55 and 59 years of age, the group-specific limit was 625,400 euros.

Surveys on self-classification in the wealth distribution show that not even 3 percent of households feel they belong to the 20 percent with the greatest wealth (Deutsche Bundesbank, 2019). Belonging to the lower to middle wealth ranges is overestimated. This subjective classification in the distribution of wealth is similar to the self-classification in the income distribution (Engelhardt / Wagener, 2018). The empirical distributions of income and wealth, on the other hand, differ fundamentally. This is expressed in the measured level of the respective inequality. The Gini coefficient of needs-weighted household net income is just below 0.3, the Gini coefficient of household net wealth - even with a rather unusual need-weighting of wealth - above 0.7. The greater inequality in the distribution of wealth is also reflected in the significantly larger absolute range of the distribution. Based on the currently available data from the Socio-Economic Panel (SOEP, 2017, excluding business assets) or the income and consumption sample (EVS, 2018, excluding business assets), the limit to the 10 percent of private households with the lowest wealth is EUR 0 each. In order to belong to the wealthiest 10 percent, however, you need at least a household net worth of 458,500 euros according to SOEP 2017 or 477,200 euros according to EVS 2018. With these values, the so-called 90th percentile is around seven times higher than the median wealth (p90 / p50- Ratio). In the case of net household income, on the other hand, the 90th percentile is only about twice as high as the median income.

The older the household members are, the more wealth they have on average. According to the EVS, a household with a main income earner under the age of 30 was among the wealthiest 10 percent of its age-specific comparison group in 2018 if it had combined net assets of at least 71,300 euros (Figure). A household with an HEB between 55 and 59 years, on the other hand, needed a significantly higher net wealth of at least 625,400 euros, a household with an HEB 75 and over still at least 517,700 euros. Although the absolute range of wealth in the individual age groups increases with age, relative inequality decreases with increasing age: To belong to the top 10 percent of the youngest age group, a household must have at least 14 times the median wealth of the age group , for 55 to 59 year olds at least five times as much. The Gini coefficient of wealth distribution in the age groups with an HEB under 35 years of age is 0.8 and higher, and from 45 years of age it varies between 0.63 and 0.65. Looking at all households across all ages, it is not surprising, given the pronounced age effects in the distribution of wealth, that younger households are underrepresented in the group of the top 10 percent.