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Is There a Growing Risk of Old-Age Poverty in East Germany?

Author

Listed:
  • Stefan Krenz
  • Wolfgang Nagl
  • Joachim Ragnitz

Abstract

Is old-age poverty becoming a serious problem in Germany? Long-term unemployment and increasing disruptions in employment biographies induce shrinking retirement arrangements. We analyze the income security through the statutory pension scheme, which is still the most important income source for pensioners. Therefore we develop a micro-simulation-model to compare the situation of new retirees in 2020–2022 to those in 2004–2006. We do this for the most common household-types in East and West Germany in respect to gender and education in order to find specific differences. For both parts of Germany education is the key to a sufficient statutory pension. The currently higher average pensions in East Germany will decrease over time. In general, the probability of old-age poverty increases. Our findings help to clarify the risk of post-retirement poverty for specific household constellations. Comment by Jürgen Schupp.

Suggested Citation

  • Stefan Krenz & Wolfgang Nagl & Joachim Ragnitz, 2009. "Is There a Growing Risk of Old-Age Poverty in East Germany?," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 60(Supplemen), pages 35-54.
    • Handle: RePEc:aeq:aeqaeq:v60_y2009_is_q5_p35-54
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    Citations

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    Cited by:

    1. Johannes Geyer & Viktor Steiner, 2010. "Public Pensions, Changing Employment Patterns, and the Impact of Pension Reforms across Birth Cohorts: A Microsimulation Analysis for Germany," Discussion Papers of DIW Berlin 984, DIW Berlin, German Institute for Economic Research.
    2. Kumpmann Ingmar & Gühne Michael & Buscher Herbert S., 2012. "Armut im Alter – Ursachenanalyse und eine Projektion für das Jahr 2023: Old Age Poverty – Causes and a Projection for 2023," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 232(1), pages 61-83, February.
    3. Stefan Arent & Wolfgang Nagl, 2010. "A Fragile Pillar: Statutory Pensions and the Risk of Old-Age Poverty in Germany," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 66(4), pages 419-441, December.
    4. Bofinger, Peter & Buch, Claudia M. & Feld, Lars P. & Schmidt, Christoph M. & Wieland, Volker, 2013. "Gegen eine rückwärtsgewandte Wirtschaftspolitik. Jahresgutachten 2013/14 [Against a backward-looking economic policy. Annual Report 2013/14]," Annual Economic Reports / Jahresgutachten, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, volume 127, number 201314.
    5. Wolfgang Nagl, 2009. "Fiskalische Belastung durch staatliche Unterstützungsleistungen im Alter 2020 in Sachsen," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 16(03), pages 11-16, June.
    6. Joachim Ragnitz & Mona Förtsch, 2018. "Regionale Armut: Auf die Perspektive kommt es an," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 25(06), pages 03-06, December.
    7. Kumpmann, Ingmar & Gühne, Michael & Buscher, Herbert S., 2010. "Armut im Alter – Ursachenanalyse und eine Projektion für das Jahr 2023," IWH Discussion Papers 8/2010, Halle Institute for Economic Research (IWH).
    8. Wolfgang Nagl, 2014. "Lohnrisiko und Altersarmut im Sozialstaat," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 54.
    9. Stefan Arent & Alexander Eck & Oskar Krohmer & Robert Lehmann & Wolfgang Nagl & Joachim Ragnitz & Marcel Thum, 2011. "Wirtschaftliche Entwicklung Sachsens im Ländervergleich: Bestandsaufnahme und Perspektiven: Gutachten im Auftrag der Sächsischen Staatskanzlei," ifo Dresden Studien, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 59.
    10. Stefan Arent, 2012. "Zuschussrente: die Diskussion um die Altersarmutsgefährdung," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 19(05), pages 24-28, October.
    11. Stefan Arent & Wolfgang Nagl, 2010. "Binnenwanderungssalden der sächsischen Landkreise," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 17(05), pages .5-10, October.
    12. Stefan Arent, 2012. "Pension supplement: the Debate Over the Risk of Old-Age Poverty," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 65(19), pages 21-25, October.
    13. Stefan Arent & Wolfgang Nagl, 2010. "Binnenwanderungssalden der sächsischen Landkreise," ifo Dresden berichtet, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 17(05), pages 5-10, October.

    More about this item

    Keywords

    statutory pension system; old-age poverty risk; pension distribution; micro-simulation model;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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