Based on a moderate macroeconomic productivity dynamic, between the years 2017 and 2025, gross earnings will increase by an average price-adjusted 3,300 euros or a good 400 euros per year, taking them from an annual 30,500 euros to 33,800 euros per employed person. This is the conclusion of the “Wage income developments 2025 − Impact of productivity dynamics on individuals” study, produced by Prognos on behalf of the Bertelsmann Stiftung. That being said, there are major differences between the industries: gross earnings per employee increase most strongly in absolute terms, with an increase of just under 6,000 euros (around 750 euros per year) in motor vehicle construction, and the least in the agricultural industry, with an increase of 1,400 euros (almost 200 euros per year). Impact of productivity gains on individuals Households also benefit to differing extents from this development: couples see the greatest increase, both with and without children. Single parents as well as single persons, on the other hand, are less affected, as they are more likely to work in industries with weaker productivity dynamics. The gross earnings of women are significantly lower than those of men: as single parents are mainly women, they are more likely to work part-time and often in industries with low productivity gains, such as healthcare. While women will see an increase in their gross earnings of 80 euros annually between 2017 and 2025, the annual gross earnings of men will increase by 500 euros. If the working population is divided into income classes, it appears that high earners benefit more from macroeconomic productivity dynamics than low earners. “By 2025, the wage gap will continue to open up,” explains Prognos project manager, Dr. Andreas Sachs. “The German tax and transfer system can only mitigate, but not eliminate, this increasing spread.” Various scenarios The above-mentioned results of the base scenario are even more pronounced if scenario calculations are used that assume exceptionally high macroeconomic productivity dynamics. Those who profit are, in particular, male workers who already take home above-average income and live in a couple household. Single-parent women on a low income, on the other hand, are much worse off. Assuming exceptionally low macroeconomic productivity dynamics, male workers in couples benefit less, and the income gap with single women is slightly reduced. Methodology To quantify the differences between employed persons, this study combines macroeconomic forecasts with a detailed micro-data set and a microeconomic tax and transfer model. The focus is on wage income development at the individual level for three productivity dynamic scenarios up to the year 2025. The respective productivity dynamics have different effects on the various industries. These industry-specific effects are linked to the continuation of the microeconomic employment and income situation on the basis of the socio-economic panel. All of these calculations result in the development of gross hourly wages, gross earnings, working hours, and the disposable income of the individual or individuals. When determining disposable income, the actual composition of private households is taken into account. To the study (PDF, in German) Further info on the study (Bertelsmann website, in German) Project team: Dr Andreas Sachs, Jakob Ambros, Jan Limbers, Dr Stefan Moog, Heidrun Weinelt Last update: 08.12.2020 Do you have questions? Your contact at Prognos Dr Andreas Sachs Project Manager View profile Our work on this topic Take a look at our latest projects and activities. The invisible value of care work 2024 | Expertise 72 billion hours: That is how many unpaid care work hours are performed in Germany, annually, by women. In a new paper, we show the value of unpaid care work and how unevenly it is dis-tributed between men and women. Read more Regional purchasing power of pensions 2023 | Project Where in Germany is retirement particularly cheap and where has it become more expensive than average? Prognos examined this for the German Insurance Industry Association. 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