Volatility of Social Security Wealth: Political Risks of Benefit-Rule Changes in Germany
AbstractWe address the question of how the generosity of the German public pension systems' benefit rule has changed during the past three decades. In order to do so, we firstly outline the social security reforms of the past 50 years. Then, we illustrate political risk by measuring the volatility of social security wealth induced by the legislative benefit rule changes. Our results show that the standard deviation resulting in the scenarios and cohorts considered is well over 10%. Furthermore, it turns out that the gross social security wealth can be subject to losses between 30% and 60% over the life cycle.
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Bibliographic InfoArticle provided by Mohr Siebeck, Tübingen in its journal FinanzArchiv.
Volume (Year): 63 (2007)
Issue (Month): 1 (March)
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Web page: http://www.mohr.de/fa
Postal: Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany
Find related papers by JEL classification:
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
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