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Decomposition of Demographic Effects on the German Pension System

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  • Robert Fenge
  • François Peglow

Abstract

The paper analyses the impact of demographic developments on the German pension system until the year 2060. The projections are simulated for a range of assumptions on the latest demographic trends and on the labour market and comprise the latest pension legislation. As a central innovation we present a decomposition approach which allows to identify the isolated effects of mortality, fertility and migration developments on the dynamics of the German pension system. We show that the past population structure - driven by past fertility changes - and future mortality improvements will be the most important factors shaping the development of the German pension system. The results have a number of implications for effective and sustainable pension reforms.

Suggested Citation

  • Robert Fenge & François Peglow, 2017. "Decomposition of Demographic Effects on the German Pension System," CESifo Working Paper Series 6834, CESifo.
    • Handle: RePEc:ces:ceswps:_6834
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    Cited by:

    1. Schön, Matthias, 2020. "Demographic change and the rate of return in PAYG pension systems," Discussion Papers 57/2020, Deutsche Bundesbank.
    2. Matthias Schön, 2023. "Demographic change and the rate of return in pay-as-you-go pension systems," Journal of Population Economics, Springer;European Society for Population Economics, vol. 36(3), pages 1799-1827, July.
    3. Mădălina-Gabriela ANGHEL & Dragoș-Alexandru HAȘEGAN, 2021. "Statistical analysis on population ageing," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(2(627), S), pages 83-96, Summer.
    4. Schön, Matthias, 2020. "Long-term outlook for the German statutory pension system," Discussion Papers 22/2020, Deutsche Bundesbank.
    5. Dennis C. Tale, 2023. "The Impact of the COVID-19 Pandemic on the German Pension System," ACTA VSFS, University of Finance and Administration, vol. 17(1), pages 60-72.

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    More about this item

    Keywords

    population ageing; German pension system; labour market;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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