WP released: Routes to the Top

The paper “Routes to the Top” is currently being circulated for comments as DIW Discussion Paper 2066.

Abstract:

Who makes it to the top? Johannes König (DIW), Christian Schluter (AMSE) and Carsten Schröder (DIW) use the leading, socio-economic survey in Germany supplemented by extensive data on the rich to answer this question. We identify the key predictors for belonging to the top 1 percent of income, wealth, and both distributions jointly. Although we consider many, only a few traits matter: Entrepreneurship and self-employment in conjunction with a sizeable inheritance of company assets is the most important covariate combination across all rich groups. Our data suggest that all top 1 percent groups, but especially the joint top 1 percent, are predominantly populated by intergenerational entrepreneurs.


This work is part of our LINDY research programme.

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Christian Schluter
Professor of Economics

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