Gini coefficient

The Gini coefficient measures the inequality of the distribution of income or wealth in a society.

Scale:

• 0: perfect equality (everyone has exactly the same)
• 1: perfect inequality (one person has everything, everyone else nothing)
• Under 0.25: very low inequality (Scandinavian countries)
• 0.25–0.35: moderate inequality (Western Europe)
• 0.35–0.50: high inequality (USA, China)
• Over 0.50: extreme inequality (South Africa, Brazil)

Germany:

• Income Gini: 0.31 – moderate, similar to France
• Wealth Gini: 0.78 (!!) – one of the highest in Europe
• This means: incomes are distributed relatively evenly, but WEALTH is extremely unequal

Why the wealth Gini is so high:

• Low home ownership rate (tenants don't build up property wealth)
• Strong welfare state ("the state takes care of it" → less private provision)
• Late introduction of funded retirement provision