Arbeitspapier
Age-Specific Entrepreneurship and PAYG Public Pensions in Germany
We present new empirical evidence on the distribution of earnings, income and wealth among entrepreneurs in Germany. We document that both earnings and income are more concentrated among entrepreneurs than among workers and describe a large-scale overlapping-generations model that can replicate these findings. As an application, we compute the equilibrium effects of a reform of the German pay-as-you-go pension system in which entrepreneurs must also contribute and receive a pension. We show that in the presence of mobility between workers and entrepreneurs, the expected lifetime utility of all newborn households unanimously declines due to the general equilibrium effects of lower aggregate savings, and welfare losses amount to approximately 5% of total consumption. In addition, the integration of self-employed workers into the social security system in Germany does not help to improve its fiscal sustainability, and only an increase in the retirement age to 70 years will help to finance pensions at the present level beyond the year 2050.
- Language
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Englisch
- Bibliographic citation
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Series: CESifo Working Paper ; No. 8439
- Classification
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Wirtschaft
Social Security and Public Pensions
Personal Income, Wealth, and Their Distributions
Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡
Demographic Trends, Macroeconomic Effects, and Forecasts
Entrepreneurship
Computable General Equilibrium Models
- Subject
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entrepreneurship
aging
income distribution
overlapping generations
social security
fiscal sustainability
- Event
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Geistige Schöpfung
- (who)
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Heer, Burkhard
Trede, Mark
- Event
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Veröffentlichung
- (who)
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Center for Economic Studies and Ifo Institute (CESifo)
- (where)
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Munich
- (when)
-
2020
- Handle
- Last update
-
10.03.2025, 11:45 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Heer, Burkhard
- Trede, Mark
- Center for Economic Studies and Ifo Institute (CESifo)
Time of origin
- 2020
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