"If the differences between poor and rich are felt to be too big in a society, and wealth seems mostly to be acquired without rewarding work, then acceptance of the economic and social order can shrink," the labour ministry study said.
The annual report highlighted "the great importance for people that they and their children should be able to increase their social standing, or at least keep it from falling.
"If that is called into question, it can cause disquiet in all classes of society," the authors said.
In Germany, the richest 10 percent of households own more than half of all the wealth in the country, while the poorest 50 percent hold around 1.0 percent, Labour Minister Andrea Nahles told journalists at a press conference Thursday.
Two-thirds of the wealth in the country originates from inheritances or gifts.
Meanwhile, opportunities for children to climb higher on the career ladder than their parents have dwindled.
Children born to parents with little education or low-skilled jobs in the 1970s and 1980s were half as likely to achieve a better standard of living than their parents compared with those born in the 1960s, the report found.
Wealth distribution and the risk of falling into poverty have remained steady in Germany "despite the good economic situation and the overall increase in employment," the report found.
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