We employ German Sample Survey Income data to examine income inequality and
the financial situation of elderly citizens for the period from 1978 to 2003,
focussing on differences between retired and non-retired elderly and between
elderly with residence in the Old and the New German Laender. Inter-temporal
changes in income inequality are also decomposed by income sources. To our
knowledge, this is the first study that provides comparable and detailed
longitudinal income statistics for the German elderly. We find some remarkable
inter-temporal patterns. First, the financial situation of the elderly has
improved substantially over time. This is true especially for the New Laender,
although elderly with residence in the Old Laender remain financially
privileged. Within the same age cohort, we also find that non-retired, on
average, are financially better-off compared to retired elderly. For reunified
Germany, inequality is astonishingly stable over time, but rises significantly
since 1993 in the New German Laender