Measuring intra-generational redistribution in PAYG pension schemes

Artikel

Voters in ageing societies expect pension reforms to be both inter-generationally and intra-generationally fair. In this paper, we propose a global measure of intra-generational redistribution in pay-as-you-go pension schemes as a basis for voters' evaluations of reforms. Our novel index only requires information on contributions by and pension benefits paid to retirees, enabling us to measure intra-generational redistribution isolated from possible inter-generational redistribution. We rely on the contribution records of approximately 100,000 Germans, who progressed into retirement in 2007–2015, to measure the level of intra-generational redistribution in the German statutory pension scheme (GRV). A recent reform of the childcare benefit provision, which became effective in 2014, confirms the predictions of our index. The reform introduced additional benefits for a substantial subgroup of German mothers, owing to which the index value for women, but not for men, jumps up. Our findings suggests that GRV fulfills the ideal of a Bismarckian pension system without intra-generational redistribution for men, while women benefit significantly from intra-generational redistribution.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Public Choice ; ISSN: 1573-7101 ; Volume: 190 ; Year: 2021 ; Issue: 1-2 ; Pages: 53-73 ; New York, NY: Springer US

Classification and Topics

• Classification: Wirtschaft ; Social Security and Public Pensions ; Personal Income, Wealth, and Their Distributions ; Large Data Sets: Modeling and Analysis
• Subject: PAYG pension systems ; Political support for reform ; Intra-generational redistribution ; Beveridge versus Bismarck ; Index ; Micro-data ; Germany

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Klos, Jonas ; Krieger, Tim ; Stöwhase, Sven
• Event: Veröffentlichung
• (who): Springer US
• (where): New York, NY
• (when): 2021

Further information

• DOI: doi:10.1007/s11127-021-00914-w
• Last update: 10.03.2025, 11:41 AM CET