Vom Arbeitsmarkt in den Ruhestand: Die Einkommen deutscher Rentner und Rentnerinnen

This paper considers the transition from the labor market to retirement and the income position of elderly households in Germany. The empirical analysis is based on the German Socio-Economic Panel, the Income and Expenditure Survey 1993, and on social security data. The analysis reveals that exiting from the labor market and receiving a pension very often do not coincide, since there exist formal or informal pre-retirement schemes that are widely used. Moreover, retirement is not a time of inactivity: Labor incomes do play an important role at least up to age 70. The income situation of a large majority of elderly households is good relative to the active generations. Welfare receipt of elderly shows that poverty is not a typical problem of elderly. Yet, there remain a few pockets of poverty since public pensions are strictly work related. Particularly, women often used to have interrupted work histories. The situation of women has improved during the last 20 years and is still improving due to a further rise in female labor market participation. The future income situation of elderly will be challenged by population aging and the inevitable reduction in replacement rates of public pensions. However, increased private savings, increased labor market participation, and a reduction in early retirement may compensate this.