Levels and Drivers of Lifetime Earnings

Mattis Beckmannshagen, Carsten Schröder, Yogam Tchokni

Abstract:
We analyze the distribution and determinants of lifetime labor earnings in Germany
using novel linked data that combine administrative employment records with rich
survey information. Unlike previous studies, our data represents the entire workforce by
including self-employed individuals, civil servants, and those with interrupted careers.
We examine key potential drivers of lifetime earnings across three life stages: early life
conditions, early adulthood, and mid-life family and employment choices, and quantify
their lifetime returns. Our findings reveal large gender gaps, strong impacts of childhood
environment and family formation, and significant differences in lifetime versus cross-
sectional estimates