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The Demographic Deficit – the Facts, the Consequences, the Causes and Policy Implications

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  • Hans-Werner Sinn

Abstract

Germany is ageing faster than almost all of the other countries in the world and has fewer new-borns in relation to its population than any other advanced economy on the planet. This trend has fatal implications for the state social security system’s ability to function, and especially for pension insurance, as it means a deficit of contributors who are crucial to the future financing of pensions. The pension system itself is one of the main economic causes of childlessness in Germany. The system has taken responsibility for their old-age income away from people and has thus significantly contributed to childlessness in Germany. To correct this aberration, the introduction of pension entitlements dependent on an individual’s number of children is recommended. Individuals who do not spend any money on educating children because they do not have any should invest the money saved as a result, rather than spending it.

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  • Hans-Werner Sinn, 2013. "The Demographic Deficit – the Facts, the Consequences, the Causes and Policy Implications," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 66(21), pages 03-23, November.
    • Handle: RePEc:ces:ifosdt:v:66:y:2013:i:21:p:03-23
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    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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