Pension reform and demographic uncertainty: the case of Germany
The present paper compares the distributional and risk-sharing consequences of two pension reform proposals in Germany which both aim to improve the sustainability of the current system by introducing demographic variables to the benefit calculation. While the first reform proposes a so-called "sustainability factor" which measures the changes in the dependency ratio, the second reform proposes a so-called "demographic factor" which takes into account the changes in life expectancy. Our simulations indicate that both reforms imply a double burden for currently middle-aged generations and a double relief for future living generations. On the one side, resources are redistributed from currently towards future living generations. In addition, part of the risk from demographic uncertainty is shifted from future living towards currently living middle-aged generations. The reforms differ, however, with respect to the magnitude of the resource distribution and risk implications. Therefore, future generations are much better of with the "sustainability factor", while it is not clear whether middle-aged generations are better off with the "demographic factor" or the "sustainability factor".
(This abstract was borrowed from another version of this item.)
Volume (Year): 5 (2006)
Issue (Month): 01 (March)
|Contact details of provider:|| Postal: Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK|
Web page: http://journals.cambridge.org/jid_PEF
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.:
- Roel Beetsma, 2001.
"The Budgeting and Economic Consequences of Ageing in The Netherlands,"
CESifo Working Paper Series
630, CESifo Group Munich.
- Beetsma, Roel & Bettendorf, Leon & Broer, Peter, 2003. "The budgeting and economic consequences of ageing in the Netherlands," Economic Modelling, Elsevier, vol. 20(5), pages 987-1013, September.
- Hans Fehr & Sabine Jokisch & Laurence Kotlikoff, 2003.
"The Developed World's Demographic Transition - The Roles of Capital Flows, Immigration, and Policy,"
NBER Working Papers
10096, National Bureau of Economic Research, Inc.
- Hans Fehr & Sabine Jokisch & Larry Kotlikoff, 2003. "The Developed World's Demographic Transition - the Roles of Capital Flows, Immigration, and Policy," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-133, Boston University - Department of Economics.
- Fehr, Hans, 1999.
"Pension reform during the demographic transition,"
W.E.P. - Würzburg Economic Papers
8, University of Würzburg, Chair for Monetary Policy and International Economics.
- Lassila, Jukka & Valkonen, Tarmo, 2000.
"Pension Prefunding, Ageing, and Demographic Uncertainty,"
741, The Research Institute of the Finnish Economy.
- Jukka Lassila & Tarmo Valkonen, 2001. "Pension Prefunding, Ageing, and Demographic Uncertainty," International Tax and Public Finance, Springer, vol. 8(4), pages 573-593, August.
- Fehr, Hans, 1999. "Welfare Effects of Dynamic Tax Reforms," Beiträge zur Finanzwissenschaft, Mohr Siebeck, Tübingen, edition 1, volume 5, number urn:isbn:9783161470165, May.
- Georg Hirte, 2002. "Welfare and Macroeconomic Effects of the German Pension Acts of 1992 and 1999: A Dynamic CGE Study," German Economic Review, Verein für Socialpolitik, vol. 3(1), pages 81-106, 02.
- Alho, Juha M. & Hougaard Jensen, Svend E. & Lassila, Jukka & Valkonen, Tarmo, 2005. "Controlling the effects of demographic risks: the role of pension indexation schemes," Journal of Pension Economics and Finance, Cambridge University Press, vol. 4(02), pages 139-153, July.
- Florian Heiss & Alexander Ludwig & Joachim Winter, 2002.
"Pension reform, capital markets, and the rate of return,"
MEA discussion paper series
02023, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
- Axel Boersch-Supan & Florian Heiss & Alexander Ludwig & Joachim Winter, 2003. "Pension Reform, Capital Markets and the Rate of Return," German Economic Review, Verein für Socialpolitik, vol. 4(2), pages 151-181, 05.
- Börsch-Supan, Axel & Heiss, Florian & Winter, Joachim, 2000. "Pension reform, capital markets, and the rate of return," Discussion Papers 589, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.
- Börsch-Supan, Axel H. & Heiss, Florian & Ludwig, Alexander & Winter, Joachim, 2003. "Pension reform, capital markets and the rate of return," Munich Reprints in Economics 20200, University of Munich, Department of Economics.
- Ronald D. Lee & Ryan D. Edwards, 2001. "The fiscal impact of population change," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 46.
- Bonin, Holger, 2001. "Will it Last? An Assessment of the 2001 German Pension Reform," IZA Discussion Papers 343, Institute for the Study of Labor (IZA).
When requesting a correction, please mention this item's handle: RePEc:cup:jpenef:v:5:y:2006:i:01:p:69-90_00. 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: (Keith Waters)
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.