Maintaining One's Living Standard at Old Age - What Does That Mean?: Evidence Using Panel Data from Germany
AbstractHow much retirement income is needed in order to maintain one's living standard at old age? As it is difficult to find a firm basis for an empirical treatment of this question, we employ a novel approach to assessing an adequate replacement rate vis- a-vis income in the pre-retirement period. We subject indications regarding satisfaction with current income as collected in the German Socio-Economic Panel (SOEP) to longitudinal analyses, using linear fixed-effects models and fixed-effects ordered logit models as our main analytical tools. We obtain a required net replacement rate of about 87% for the year of entry into retirement as a rather robust result, while replacement rates keeping the living standard unchanged may slightly decline over the retirement period.
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Bibliographic InfoPaper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 563.
Length: 30 p.
Date of creation: 2013
Date of revision:
Retirement; living standard; replacement rate; pensions; saving; satisfaction;
Other versions of this item:
- Christian Dudel & Notburga Ott & Martin Werding, 2013. "Maintaining One's Living Standard at Old Age: What Does that Mean? Evidence Using Panel Data from Germany," CESifo Working Paper Series 4223, CESifo Group Munich.
- D1 - Microeconomics - - Household Behavior
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
This paper has been announced in the following NEP Reports:
- NEP-AGE-2013-07-15 (Economics of Ageing)
- NEP-ALL-2013-07-15 (All new papers)
- NEP-DEM-2013-07-15 (Demographic Economics)
- NEP-EUR-2013-07-15 (Microeconomic European Issues)
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