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Pension Reform in Germany: The Impact on Retirement Decisions

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Author Info
Barbara Berkel ()
Axel Börsch-Supan () (Mannheim Research Institute for the Economics of Aging (MEA))
Abstract

The financing problems beleaguering the public pension system have again shifted the spotlight onto the retirement age. This paper examines the impact of various reform options on the actual retirement choices of older workers. The paper focuses in particular on the long-term implications of the changes implemented in pension legislation since 1992 and the reform options discussed by the German Social Security Reform Commission installed in 2002, the so called "Rürup Commission". Our simulations show that the early-retirement pension adjustment factors introduced by the 1992 pension reform will, in the long term, raise the average effective age of retirement for men by somewhat less than two years. The across-the-board two-year increase in all the relevant age limits proposed by the "Rürup Commission" would raise the effective average age of retirement of men by about eight months. If the actuarial adjustment factor is increased from 3.6% to 6% per year, the effective average retirement age rises by almost two years. The effects are considerably weaker for women.

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Paper provided by Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim in its series MEA discussion paper series with number 03036.

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Date of creation: 15 Sep 2003
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Handle: RePEc:mea:meawpa:03036

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Z00 - Other Special Topics - - General - - - General

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. John Rust & Christopher Phelan, 1997. "How Social Security and Medicare Affect Retirement Behavior in a World of Incomplete Markets," Econometrica, Econometric Society, vol. 65(4), pages 781-832, July.
    Other versions:
  2. Borsch-Supan, Axel, 2000. "A Model under Siege: A Case Study of the German Retirement Insurance System," Economic Journal, Royal Economic Society, vol. 110(461), pages F24-45, February. [Downloadable!] (restricted)
  3. Sikandar Siddiqui, 1997. "The pension incentive to retire: Empirical evidence for West Germany," Journal of Population Economics, Springer, vol. 10(4), pages 463-486. [Downloadable!] (restricted)
  4. Börsch-Supan, Axel, 2001. "Incentive Effects of Social Security Under an Uncertain Disability Option," Sonderforschungsbereich 504 Publications 01-42, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim.
  5. David M. Cutler & Louise Sheiner, 1998. "Demographics and Medical Care Spending: Standard and Non-Standard Effects," NBER Working Papers 6866, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  6. Borsch-Supan, Axel & Schnabel, Reinhold, 1998. "Social Security and Declining Labor-Force Participation in Germany," American Economic Review, American Economic Association, vol. 88(2), pages 173-78, May. [Downloadable!] (restricted)
  7. James H. Stock & David A. Wise, 1990. "The Pension Inducement to Retire: An Option Value Analysis," NBER Working Papers 2660, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  8. Börsch-Supan, Axel & Schnabel, Reinhold, 1997. "Social security and retirement in germany," Sonderforschungsbereich 504 Publications 97-20, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim.
    Other versions:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Lothar Essig, 2005. "Household Saving in Germany: Results from SAVE 2001-2003," MEA discussion paper series 05083, Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim. [Downloadable!]
  2. Karsten Hank, 2004. "Effects of Early Life Family Events on Women’s Late Life Labour Market Behaviour: An Analysis of the Relationship between Childbearing and Retirement in Western Germany," MEA discussion paper series 04047, Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim. [Downloadable!]
  3. Rob Euwals & Daniel J. van Vuuren & Ronald P. Wolthoff, 2006. "Early Retirement Behaviour in the Netherlands: Evidence from a Policy Reform," Tinbergen Institute Discussion Papers 06-021/3, Tinbergen Institute. [Downloadable!]
    Other versions:
  4. Christina Benita Wilke, 2005. "Rates of Return of the German PAYG System - How they can be measured and how they will develop," MEA discussion paper series 05097, Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim. [Downloadable!]
  5. Schleife, Katrin, 2004. "Computer Use and the Employment Status of Older Workers : An Analysis Based on Individual Data," ZEW Discussion Papers 04-62, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  6. Katrin Schleife, 2004. "Computer Use and the Employment Status of Older Workers - An Analysis Based on Individual Data," Darmstadt Discussion Papers in Economics 145, Institut für Volkswirtschaftslehre (Department of Economics), Technische Universität Darmstadt (Darmstadt University of Technology). [Downloadable!]
  7. Christina Benita Wilke, 2005. "Rates of Return of the German PAYG System - How they can be measured and how they will develop," MEA discussion paper series 05097, Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim. [Downloadable!]
  8. Axel Boersch-Supan, 2006. "European Welfare State Regimes and Their Generosity Toward the Elderly," Economics Working Paper Archive wp_479, Levy Economics Institute, The. [Downloadable!]
  9. Börsch-Supan, Axel & Essig, Lothar, 2005. "Personal assets and pension reform: How well prepared are the Germans?," Sonderforschungsbereich 504 Publications 05-19, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim. [Downloadable!]
  10. Essig, Lothar, 2004. "Household Saving in Germany:," Sonderforschungsbereich 504 Publications 05-23, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim. [Downloadable!]
  11. Axel Börsch-Supan, 2003. "What are NDC Pension Systems? What Do They Bring to Reform Strategies?," MEA discussion paper series 03042, Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim. [Downloadable!]
  12. Axel Börsch-Supan & Lothar Essig, 2005. "Personal assets and pension reform: How well prepared are the Germans?," MEA discussion paper series 05085, Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim. [Downloadable!]
  13. Axel Börsch-Supan, 2003. "What are NDC Pension Systems? What Do They Bring to Reform Strategies?," MEA discussion paper series 03042, Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim. [Downloadable!]
  14. Axel Boersch-Supan & Christina B. Wilke, 2004. "The German Public Pension System: How it Was, How it Will Be," NBER Working Papers 10525, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  15. Karsten Hank, 2004. "Effects of Early Life Family Events on Women’s Late Life Labour Market Behaviour: An Analysis of the Relationship between Childbearing and Retirement in Western Germany," MEA discussion paper series 04047, Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim. [Downloadable!]
  16. Allard Bruinshoofd & Sybille Grob, 2006. "Do changes in pension incentives affect retirement? A stated preferences approach to Dutch retirement consideration," DNB Working Papers 115, Netherlands Central Bank, Research Department. [Downloadable!]
  17. Axel Börsch-Supan & Lothar Essig, 2005. "Personal assets and pension reform: How well prepared are the Germans?," MEA discussion paper series 05085, Mannheim Research Institute for the Economics of Aging (MEA), University of Mannheim. [Downloadable!]
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