Merz: The Distribution of Income of Self-employed, Entrepreneurs and Professions
26
7.3 Decomposition of Inequality of Single Professions
This last chapter discusses the decompostion of net income inequality by the Theil
inequality index as in chapter 6.4. Table 8 in particular shows the inequality shares (IWg)
as the single additive decomposed within group inequality part and the overall between
group share, in particular. For the easyness of survey the results in this Table are
ordered by the size of the 14 inquality shares.
The within ('intra') group inequality (IW = 80,96% = 100 - 19,04) compared to the
between ('inter') group inequality of IB = 19,04% is dominant. The dominance, however,
is by far not as strong as between the employees and self-employed (entrepreneurs and
professions*) stated in chapter 6. Thus, inequality differences between the employees
and the two self-employed subgroups are less pronounced as between the professions’
subgroups.
Which single profession is the most responsible for the professions’s overall inequality?
The answer is given by the single inequality shares of Table 8 which sum up to 100%.
The broad rest group of other professions, which are 39% of all professions contribute
to overall inequality almost by the size of its population share: by 38%. It is desirable,
that with further definitions and groupings of the professions by the Federal Statistical
Office, this group will be more divided to provide more insights of the single
contributions. Next in line is the contribution of medical doctors (14,1%) and of
architects (13,6%). All other ten single professions contribute with less than 10% with a
broad range again from 7,5% by lawyers/notaries and 6,8% by dentists compared to
0,62% by auditors and 0,13% by chemists. With regard to the population share and
relative income and income inequality importance the inequality shares of other
professions, medical doctors and architects together ‘explain’ ca. two out of three (66%)
of the overall inequality. Such an ordering is not deductable by the single Theil indices;
e.g. the natural medical practioners had shown an outstanding inequality with a Theil-
index even greater than 1, however, the inequality contribution to the professions’
inequality overall, is less than 2%.