Advanced Search
MyIDEAS: Login

How risky is the German pension system? The volatility of the internal rates of return

Contents:

Author Info

  • Heidler, Matthias
  • Raffelhüschen, Bernd
Registered author(s):

    Abstract

    In this paper we analyze exemplarily the volatility of the internal rates of return of the German pension system over the life-cycle of an individual born in 1957. The outcome is compared to an alternative defined-contribution or defined-benefit policy. Based on the actual data, our results show the volatility of the internal rate of return to be significantly higher under the actual policy. We furthermore find that the sustainable internal rates of return are close to zero for the youngest male cohorts and positive for females for optimistic growth scenarios. In more realistic scenarios things turn worse. --

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://econstor.eu/bitstream/10419/46213/1/662495691.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by Research Center for Generational Contracts (FZG), University of Freiburg in its series FZG Discussion Papers with number 6.

    as in new window
    Length:
    Date of creation: 2005
    Date of revision:
    Handle: RePEc:zbw:fzgdps:6

    Contact details of provider:
    Postal: Kollegiengebäde II, Platz der Alten Synagoge, 79085 Freiburg
    Phone: +49 +761 / 203 2301
    Fax: +49 +761 / 203 2303
    Web page: http://www.generationenvertraege.de/
    More information through EDIRC

    Related research

    Keywords: Risk; internal rate of return; sustainability;

    Find related papers by JEL classification:

    References

    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.:
    as in new window
    1. John McHale, 2001. "The Risk of Social Security Benefit-Rule Changes: Some International Evidence," NBER Chapters, in: Risk Aspects of Investment-Based Social Security Reform, pages 247-290 National Bureau of Economic Research, Inc.
    2. Auerbach, Alan J & Gokhale, Jagadeesh & Kotlikoff, Laurence J, 1992. " Generational Accounting: A New Approach to Understanding the Effects of Fiscal Policy on Saving," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(2), pages 303-18.
    3. Börsch-Supan, Axel, 2005. "Risiken im Lebenszyklus: Theorie und Evidenz," Sonderforschungsbereich 504 Publications 05-05, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim.
    4. Axel Börsch-Supan, 2005. "Risiken im Lebenszyklus: Theorie und Evidenz," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 6(4), pages 449-469, November.
    5. David Bradford, 1991. "Tax Policy and the Economy, Volume 5," NBER Books, National Bureau of Economic Research, Inc, number brad91-1, May.
    6. Christoph Borgmann & Matthias Heidler, 2003. "Demographics and Volatile Social Security Wealth: Political Risks of Benefit Rule Changes in Germany," CESifo Working Paper Series 1021, CESifo Group Munich.
    7. Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff, 1994. "Generational Accounting: A Meaningful Way to Evaluate Fiscal Policy," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 73-94, Winter.
    8. Axel Börsch-Supan, 2005. "Risiken im Lebenszyklus Theorie und Evidenz," MEA discussion paper series 05069, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
    9. John Y. Campbell & Martin Feldstein, 2001. "Risk Aspects of Investment-Based Social Security Reform," NBER Books, National Bureau of Economic Research, Inc, number camp01-1, May.
    10. Muellbauer, John, 1992. " Generational Accounting: A New Approach to Understanding the Effects of Fiscal Policy on Saving: Comment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(2), pages 319-22.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:zbw:fzgdps:6. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.