Pensions and fertility: back to the roots - The introduction of Bismarck's pension scheme and the European fertility decline

Fertility has long been declining in industrialised countries and the existence of public pension systems is considered as one of the causes. This paper provides detailed evidence based on historical data on the mechanism by which a public pension system depresses fertility. Our theoretical framework highlights that the effect of a public pension system on fertility works via the impact of contributions in such a system on disposable income as well as via the impact on future disposable income that is related to the internal rate of return of the pension system. Drawing on a unique historical data set which allows us to measure these variables at a jurisdictional level for a time when comprehensive social security was introduced, we estimate the effects predicted by the model. We find that beyond the traditional determinants of the first demographic transition, a lower internal rate of return of the pension system is associated with a higher birth rate. This result is robust to including the traditional determinants of the first demographic transition as controls as well as to other policy changes at the time

Pensions and Fertility: Back to the Roots

Fertility has long been declining in industrialised countries and the existence of public pension systems is considered as one of the causes. This paper provides detailed evidence on the mechanism by which a public pension system depresses fertility, based on historical data. Our theoretical framework highlights that the effect of a public pension system on fertility is ex ante ambiguous while its size is determined by the internal rate of return of the pension system. We identify an overall negative effect of the introduction of pension insurance on fertility using regional variation across 23 provinces of Imperial Germany in key variables of Bismarck's pension system, which was introduced in Imperial Germany in 1891. The negative effect on fertility is robust to controlling for the traditional determinants of the first demographic transition as well as to other policy changes

Don't Raise the Retirement Age! An Experiment on Opposition to Pension Reforms and East-West Differences in Germany

For policy reforms to increase a society's welfare, reliable information on people's prefer-ences and expectations is crucial. Representative opinion polls, often involving simplified questions about the complex topics under debate, are an important source of information for both policy-makers and the public. Do people's answers to these poll questions reliably reflect their preferences and expectations, or does fundamental, undiscriminating opposition to reforms distort them? We address this question in the context of a recent German pension reform which raised the statutory retirement age by two years to age 67. By introducing an experiment into a representative household survey, we are able to disentangle expectations of work ability at retirement and fundamental opposition. Our results show that expected work ability declines substantially with increasing target age (63, 65, or 67 years). Answers from West German respondents reflect their current life situation as well as individual health and other risk factors. However, a fundamental opposition to reforms of the welfare state appears to strongly affect responses from East German households.retirement, health, work ability, survey experiment, public opinion poll, PAYG pension system, East Germany

What do we know about the global financial safety net? Rationale, data and possible evolution

This paper critically reviews the theoretical basis for the provision of the global financial safety net (GFSN) and provides a comprehensive database covering four elements of the GFSN (foreign exchange reserves, IMF financing, central bank swap lines and regional financing arrangements) for over 150 countries in the sample period 1960-2015. This paper also presents some key stylised facts regarding the provision of GFSN financing and compares macroeconomic outcomes in capital flow reversal episodes depending on how much GFSN financing was available to countries. Finally, this paper concludes with some avenues for further research on the possible evolution of the GFSN

Liquidity Regulation, the Central Bank, and the Money Market

As reliance on excessively short-term wholesale funding has been one of the major causes for the 2007-2009 financial crisis, recent advances in global liquidity regulation try to curb the excessive reliance on short-term wholesale funding without being clear on how such an approach will affect the overall equilibrium on money markets. In particular, liquidity regulation may interfere with the central bank's influence on short-term money market rates. This paper tries to fill the gap in understanding the interaction between the money market, the central bank, and the regulator. Importantly, it shows that the existence of a central bank can be welfare-improving when the market equilibrium is driven by collateral constraints and asymmetric information. Regulation can be welfare-improving in the presence of an externality and also in case of collateral constraints, but reduces activity on the unsecured market. This implies that in case of collateral constraints the regulator can lead to a complete crowding out of the unsecured market which leads to an increased central bank intermediation need

What Do We Know About the Global Financial Safety Net? A New Comprehensive Data Set

This paper critically reviews the theoretical basis for the provision of the global financial safety net (GFSN) and provide a comprehensive database covering four elements of the GFSN (foreign exchange reserves, IMF financing, central bank swap lines and regional financing arrangements) for over 150 countries in the sample period 1960-2015. This paper also presents some key stylised facts regarding the provision of GFSN financing and compares macroeconomic outcomes in capital flow reversal episodes depending on how much GFSN financing was available to countries. Finally, this paper concludes with some avenues for further research on the possible evolution of the GFSN

Pensions and Fertility: Back to the Roots - The Introduction of Bismarck's Pension Scheme and the European Fertility Decline

Fertility has long been declining in industrialised countries and the existence of public pension systems is considered as one of the causes. This paper is the first to provide detailed evidence based on historical data on the mechanism by which a public pension system depresses fertility. Our theoretical framework highlights that the effect of a public pension system on fertility works via the impact of contributions in such a system on disposable income as well as via the impact on future disposable income that is related to the internal rate of return of the pension system. Drawing on a unique historical data set which allows us to measure these variables a jurisdictional level for a time when comprehensive social security was introduced, we estimate the effects predicted by the model. We find that beyond a general depressing effect of social security on birth, a lower internal rate of return of the pension system is associated with a higher birth rate and a higher contribution rate is associated with a lower birth rate

What do we know about the global financial safety net? Data, rationale and possible evolution

We critically review the theoretical basis for the provision of global financial safety nets (GFSN) and provide a comprehensive database covering four types (foreign exchange reserves, IMF financing, central bank swap lines, and Regional Financing Arrangements) for over 150 countries in the sample 1970-2015. We also show some key stylised facts associated with the provision of financing associated with GFSN and compare macroeconomic outcomes around sudden stop episodes depending on how much GFSN were available for countries, and used. We conclude with some speculations on the possible evolution of the GFSN

Memorable Encounters? Own and Neighbours' Experience with IMF Conditionality and IMF Stigma

While the consequences and effectiveness of IMF conditionality have long been the focus of research, the possible negative impact of IMF conditionality on countries’ willingness to ask for an IMF programme - often termed ‘IMF stigma’ - has recently received attention particularly from policy circles. In this paper we investigate how countries’ past experience with the IMF affects their likelihood of entering an IMF arrangement again. To also allow for such learning for countries which never had an IMF programme, we include neighbours’ past IMF conditionality. Our results indicate strong learning from own experience, but hardly any learning from neighbours, except for ASEAN countries. We conjecture that the stigma associated with IMF conditionality may exist for individual country cases, but that a more general ‘IMF stigma’ cannot be related to observing how the IMF treats peers

Rente mit 67: Wie lange die Deutschen arbeiten können und wollen

Unter den Reformplänen der großen Koalition wurde und wird die Verlängerung der Lebensarbeitszeit besonders kontrovers diskutiert. Beatrice Scheubel, Center for Economic Studies (CES), und Joachim Winter, Ludwig-Maximilians-Universität München, untersuchen das häufig vorgebrachten Argument, die Menschen seien im Alter gesundheitlich nicht mehr fit genug, um bis 67 arbeiten zu können. Sie analysieren repräsentative Befragungsdaten aus der Mannheimer SAVE-Studie über die Erwartungen der noch arbeitenden Bevölkerung hinsichtlich der individuellen Arbeitsfähigkeit im Alter. Es zeigt sich, dass das Bild, das in der öffentlichen Diskussion gezeichnet wird, zu düster ist. Die verbreitete Ablehnung einer Erhöhung des Rentenalters geht nicht unbedingt mit einer niedrigen individuellen Arbeitsfähigkeit im Alter einher