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Crowding out or crowding in? Public and private transfers in Germany

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  • Reil-Held, Anette

    (Mannheim Research Institute for the Economics of Aging (MEA) and Sonderforschungsbereich 504)

Abstract

Intergenerational support regains attention in course of population aging. This paper focuses on the relationship between private and public financial transfers to and from the elderly. Based on German data we find that the giving of private transfers is influenced by public transfers. The close link between public transfers to the elderly and the financial support they give to others represents an inefficient backflow of pay-as-you-go financed pensions to the young generation. This mechanism can be interpreted as a private compensation device for the generations. We can also show that at the same time the receipt of public transfers by the elderly crowd-out private financial support they would have received otherwise in the German welfare state.

Suggested Citation

  • Reil-Held, Anette, 2004. "Crowding out or crowding in? Public and private transfers in Germany," Sonderforschungsbereich 504 Publications 04-68, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
    • Handle: RePEc:xrs:sfbmaa:04-68
    Note: Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.
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    File URL: http://www.sfb504.uni-mannheim.de/publications/dp04-68.pdf
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    References listed on IDEAS

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    Cited by:

    1. Hakenes, Hendrik & Peitz, Martin, 2004. "Selling Reputation When Going out of Business," Sonderforschungsbereich 504 Publications 04-52, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
    2. Dirk Krueger, 2006. "Public Insurance against Idiosyncratic and Aggregate Risk: The Case of Social Security and Progressive Income Taxation," CESifo Economic Studies, CESifo Group, vol. 52(4), pages 587-620, December.
    3. Hakenes, Hendrik & Peitz, Martin, 2008. "Umbrella branding and the provision of quality," International Journal of Industrial Organization, Elsevier, vol. 26(2), pages 546-556, March.

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