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

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Author Info
Wolfgang Nagl Stefan Krenz

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Abstract

The statutory pension system is still the most important income source among seniorcitizens in Germany. Due to increasing disruptions in employment biographies since the1970s and due to the mass unemployment in Eastern Germany since the 1990s, there isa growing fear of post-retirement poverty in Germany. We develop a micro-simulationmodel to compare the distribution of statutory pension incomes for new retirees in 2020with those in 2004. The pension income distribution is calculated for Eastern andWestern Germany separately, for men and women, and for different skill levels.Throughout Germany, we find a growing post-retirement poverty, especially for lowskilledworkers. Eastern Germany will lose its current advantage in terms of highpensions and low inequality.

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Publisher Info
Paper provided by Ifo Institute for Economic Research at the University of Munich in its series Ifo Working Paper Series with number Ifo Working Paper No. 76.

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Date of creation: 2009
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Handle: RePEc:ces:ifowps:_76

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Related research
Keywords: Statutory pension system; old-age poverty risk; pension distribution; education;

Find related papers by JEL classification:
I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends and Forecasts
J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped

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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. [Downloadable!]
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This page was last updated on 2009-11-28.

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