How risky is the German pension system? The volatility of the internal rates of return
AbstractIn 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 InfoIf 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.
Bibliographic InfoPaper provided by Research Center for Generational Contracts (FZG), University of Freiburg in its series FZG Discussion Papers with number 6.
Date of creation: 2005
Date of revision:
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
Risk; internal rate of return; sustainability;
Find related papers by JEL classification:
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
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.:
- John McHale, 2001.
"The Risk of Social Security Benefit-Rule Changes: Some International Evidence,"
in: Risk Aspects of Investment-Based Social Security Reform, pages 247-290
National Bureau of Economic Research, Inc.
- John McHale, 1999. "The Risk of Social Security Benefit Rule Changes: Some International Evidence," NBER Working Papers 7031, National Bureau of Economic Research, Inc.
- 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.
- Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff, 1991. "Generational accounting: a new approach for understanding the effects of fiscal policy on saving," Working Paper 9107, Federal Reserve Bank of Cleveland.
- Börsch-Supan, Axel, 2005. "Risiken im Lebenszyklus: Theorie und Evidenz," Sonderforschungsbereich 504 Publications 05-05, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim.
- Axel Börsch-Supan, 2005. "Risiken im Lebenszyklus: Theorie und Evidenz," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 6(4), pages 449-469, November.
- David Bradford, 1991. "Tax Policy and the Economy, Volume 5," NBER Books, National Bureau of Economic Research, Inc, number brad91-1, May.
- 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.
- 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.
- 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.
- 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.
- 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.
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 references are entirely missing, you can add them using this form.