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Pension Reform in Germany: The Impact on Retirement Decisions

Author

Listed:
  • Axel Börsch-Supan

    ()

  • Barbara Berkel

    () (Munich Center for the Economics of Aging (MEA))

Abstract

The paper examines the long-term implications of various reform options on retirement entry decisions and the actual retirement age of older workers. It focuses on the changes in pension legislation since 1992 and the reform options discussed by the German Social Security Reform Commission installed in 2002 (“Rürup Commission†). Our simulations show that the early-retirement adjustment factors introduced by the 1992 pension reform will raise the average effective retirement age for men by almost two years. The two-year increase in all relevant age limits proposed by the “Rürup Commission†would raise retirement age of men by another eight months.

Suggested Citation

  • Axel Börsch-Supan & Barbara Berkel, 2004. "Pension Reform in Germany: The Impact on Retirement Decisions," MEA discussion paper series 04062, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
  • Handle: RePEc:mea:meawpa:04062
    as

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    File URL: http://mea.mpisoc.mpg.de/uploads/user_mea_discussionpapers/tnm62ivgnt6rcr0e_tnm62ivgnt6rcr0e_ISSP2.5-FinArch-Rev-01Apr04_zs.pdf
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    References listed on IDEAS

    as
    1. Robin L. Lumsdaine & James H. Stock & David A. Wise, 1992. "Three Models of Retirement: Computational Complexity versus Predictive Validity," NBER Chapters,in: Topics in the Economics of Aging, pages 21-60 National Bureau of Economic Research, Inc.
    2. 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.
    3. Breyer, Friedrich & Kifmann, Mathias, 2002. "Incentives to retire later a solution to the social security crisis?," Journal of Pension Economics and Finance, Cambridge University Press, vol. 1(02), pages 111-130, July.
    4. Axel Börsch-Supan & Reinhold Schnabel & Simone Kohnz & Giovanni Mastrobuoni, 2004. "Micro-Modeling of Retirement Decisions in Germany," NBER Chapters,in: Social Security Programs and Retirement around the World: Micro-Estimation, pages 285-344 National Bureau of Economic Research, Inc.
    5. repec:crr:crrwps:2003-04 is not listed on IDEAS
    6. Palmer, Edward, 2000. "The Swedish pension reform model : framework and issues," Social Protection and Labor Policy and Technical Notes 23086, The World Bank.
    7. Jonathan Gruber & David A. Wise, 1999. "Social Security and Retirement around the World," NBER Books, National Bureau of Economic Research, Inc, number grub99-1, April.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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