From Work to Wealth? Gender, Generation, and Earnings–Wealth Linkages in the United States and Germany

• In Event: Inequalities in Income, Wealth, and Related Outcomes

Abstract

This study examines how the conversion of lifetime earnings into peak household wealth varies across generations, genders, and institutional contexts, comparing the United States and Germany. Despite rising female labor force participation and wage inequality, we find that the translation of long-run labor market position into wealth remains highly gendered and path-dependent. Using longitudinal data from the PSID and SOEP, we estimate rank-rank associations between lifetime earnings and peak wealth across four birth cohorts.
Results show a persistent conversion penalty for women in both countries, where individual earnings translate into wealth far less efficiently for women than for men. While this gender gap narrows across cohorts in both nations, the mechanisms differ fundamentally. In the U.S., the convergence is asymmetrical, driven entirely by a secular decline in male wealth conversion efficiency across generations alongside female stagnation. In Germany, the gender penalty is substantially larger; despite early female gains, wealth accumulation remains structurally limited for women and rigidly tied to a male-breadwinner logic. Furthermore, partner earnings analyses reveal that U.S. wealth formation reflects a more gender-symmetric, dual-earner regime, whereas German household wealth remains highly dependent on male earnings dominance. Ultimately, the findings demonstrate that labor market inequality spills over into wealth inequality through processes deeply mediated by national institutional contexts.

Authors

• Juliana de Castro Galvao, Nuffield College

• Nhat An Trinh, University of Oxford