Using data from the German Socio-Economic Panel, we show that changes in working hours, not changes in wages, are the major driver of rising earnings inequalities in Germany since the early 1990s. Next, we analyze whether changes in working hours are in line with employee preferences by...

According to Socio-Economic Panel (SOEP) data, inequality in gross monthly earnings in Germany increased significantly between 1993 and 2003 and has been stagnating at a high level since 2008. As this Weekly Report shows, the increase is not being driven by higher hourly wage inequality, but...