Börsch-Supan, Axel () (Sonderforschungsbereich 504)
Abstract
Germany has one of the most generous retirement systems in the world. At the very same time, Germany also faces one of the most incisive population aging processes. The ratio of workers to pensioners will decrease to about one to one within the next generation. This will put the German pay-as-you-go social security system under sever pressure. This paper has three aims. First, it shows that the design of the current system has incentive effects which make coping with the future demographic challenges particularly difficult. Second, it shows that the German pay-as-you-go mechanism cannot be fixed by any single policy measure alone. Moreover, while a combination of several feasible measures may be able to stabilize the contribution rate, the internal rate of return of the pay-as-you-go system will fall to a level that is likely to create strong incentives to opt out wherever possible. Third, the paper shows that a transition to a funded system is feasible without creating a double burden on the transition generation.
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Publisher Info
Paper provided by Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim in its series Sonderforschungsbereich 504 Publications with number
97-23.
Length: 46 pages Date of creation: 20 Jul 1997 Date of revision: Handle: RePEc:xrs:sfbmaa:97-23
Note: Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged. Contact details of provider: Postal: D-68131 Mannheim Phone: (49) (0) 621-292-2547 Fax: (49) (0) 621-292-5594 Email: Web page: http://www.sfb504.uni-mannheim.de/ More information through EDIRC
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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.:
Martin Feldstein & Jeffrey B. Liebman, 2001.
"Social Security,"
NBER Working Papers
8451, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions:
Feldstein, Martin & Liebman, Jeffrey B., 2002.
"Social security,"
Handbook of Public Economics,
in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 32, pages 2245-2324
Elsevier.
[Downloadable!] (restricted)
Axel Borsch-Supan & Reinhold Schnabel, 1999.
"Social Security and Retirement in Germany,"
NBER Chapters,
in: Social Security and Retirement around the World, pages 135-180
National Bureau of Economic Research, Inc.
[Downloadable!]
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.)
Axel Borsch-Supan & Reinhold Schnabel, 1999.
"Social Security and Retirement in Germany,"
NBER Chapters,
in: Social Security and Retirement around the World, pages 135-180
National Bureau of Economic Research, Inc.
[Downloadable!]
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