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A Fragile Pillar: Statutory Pensions and the Risk of Old-Age Poverty in Germany

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Author Info

  • Stefan Arent
  • Wolfgang Nagl

Abstract

The statutory pension system is the most important source of income for senior citizens in Germany. Due to increasing disruptions in employment biographies since the 1970s and due to the mass unemployment in eastern Germany since the 1990s, there is a growing fear of postretirement poverty in Germany. We develop a microsimulation model to compare the distribution of statutory pension incomes for new retirees in 2020 with the incomes of new retirees in 2004. The pension income distribution is calculated for eastern and western Germany separately, for men and women, and for different skill levels. Throughout Germany, we find growing postretirement poverty, especially among low-skilled workers. Eastern Germany will lose its current advantage in high pensions and low inequality.

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Bibliographic Info

Article provided by Mohr Siebeck, Tübingen in its journal FinanzArchiv.

Volume (Year): 66 (2010)
Issue (Month): 4 (December)
Pages: 419-441

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Handle: RePEc:mhr:finarc:urn:sici:0015-2218(201012)66:4_419:afpspa_2.0.tx_2-v

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Keywords: statutory pension system; old-age poverty risk; pensions; education;

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References

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  1. Michael Berlemann & Marcel Thum, 2005. "Blooming landscapes in East Germany?," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 6(4), pages 16-22, December.
  2. 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.
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Citations

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Cited by:
  1. Stefan Krenz & Wolfgang Nagl, 2009. "Die Entwicklung der Ansprüche an die gesetzliche Rentenversicherung bis zum Jahr 2020," ifo Dresden berichtet, Ifo Institute for Economic Research at the University of Munich, vol. 16(02), pages 13-23, 04.
  2. Traub, Stefan & Finkler, Sebastian, 2013. "Ein Grundsicherungsabstandsgebot für die Gesetzliche Rentenversicherung? Ergebnisse einer Mikrosimulation," Working papers of the ZeS 01/2013, University of Bremen, Centre for Social Policy Research (ZeS).
  3. Stefan Arent & Wolfgang Nagl, 2010. "Binnenwanderungssalden der sächsischen Landkreise," ifo Dresden berichtet, Ifo Institute for Economic Research at the University of Munich, vol. 17(05), pages 5-10, October.
  4. Stefan Arent, 2012. "Zuschussrente: Die Diskussion um die Altersarmutsgefährdung," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 65(19), pages 21-25, October.
  5. Hans Fehr & Manuel Kallweit & Fabian Kindermann, 2011. "Should Pensions be Progressive? Yes, at least in Germany!," CESifo Working Paper Series 3636, CESifo Group Munich.
  6. 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 for Economic Research at the University of Munich, number 59, October.
  7. Gasche, Martin & Lamla, Bettina, 2012. "Erwartete Altersarmut in Deutschland: Pessimismus und Fehleinschätzungen – Ergebnisse aus der SAVE-Studie," MEA discussion paper series 12264, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.

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