Pension Reform and Demographic Uncertainty: The Case of Germany

Arbeitspapier

The present paper compares the distributional and risk-sharing consequences of two pension reform proposals in Germany which both aim to improve the sustainability of the current system by introducing demographic variables to the benefit calculation. While the first reform proposes a so-called "sustainability factor" which measures the changes in the dependency ratio, the second reform proposes a so-called "demographic factor" which takes into account the changes in life expectancy. Our simulations indicate that both reforms imply a double burden for currently middle-aged generations and a double relief for future living generations. On the one side, resources are redistributed from currently towards future living generations. In addition, part of the risk from demographic uncertainty is shifted from future living towards currently living middle-aged generations. The reforms differ, however, with respect to the magnitude of the resource distribution and risk implications. Therefore, future generations are much better of with the "sustainability factor", while it is not clear whether middle-aged generations are better off with the "demographic factor" or the "sustainability factor".

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: W.E.P. - Würzburg Economic Papers ; No. 47

Classification and Topics

• Classification: Wirtschaft ; Computable and Other Applied General Equilibrium Models ; Demographic Trends, Macroeconomic Effects, and Forecasts ; Social Security and Public Pensions
• Subject: Stochastic population forecasts ; CGE models ; pension reform in Germany ; Rentenreform ; Gesetzliche Rentenversicherung ; Versicherungstechnik ; Wirtschaftspolitische Wirkungsanalyse ; Generationenbeziehungen ; Allgemeines Gleichgewicht ; Deutschland ; Rentenformel

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Habermann, Christian ; Fehr, Hans
• Event: Veröffentlichung
• (who): University of Würzburg, Department of Economics
• (where): Würzburg
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/22340
• Last update: 10.03.2025, 11:42 AM CET