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

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.

Estimates of consumer instalment credit extended and repaid, 1929-1939

Consumer credit

Mutualism, Parasitism, and Evolutionary Adaptation

Our investigations concern the role of symbiosis as an enabling mechanism in evolutionary adaptation. Previous work has illustrated how the formation of mutualist groups can guide genetic variation so as to enable the evolution of ultimately independent organisms that would otherwise be unobtainable. The new experiments reported here show that this effect applies not just in genetically related organisms but may also occur from symbiosis between distinct species. In addition, a new detail is revealed: when the symbiotic group members are drawn from two separate species only one of these species achieves eventual independence and the other remains parasitic. It is nonetheless the case that this second species, formerly mutualistic, was critical in enabling the independence of the first. We offer a biological example that is suggestive of the effect and discuss the implications for evolving complex organisms, natural and artificial

Crowding out or crowding in?

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.

Projection methods and scenarios for public and private pension information

Public pensions - the primary pillar of old-age income provision - will, in the future, be less generous than they have been in the past, in particular owing to the impact of demographic change. The pension gap is supposed to be plugged by the second and third pillars of pension provision. However, people require reliable planning information if they are to exercise greater individual responsibility. It is therefore absolutely essential that adequate information is made available about the level of pension benefits that will be generated by each pillar of old-age pension provision. This paper outlines a number of different means of presenting the level of future pensions and the assumptions on which such extrapolations are necessarily based. Our work is based on an assumed average rate of inflation of 1.5% and an average rate of real income growth not exceeding 1.5%. This last figure is derived from calculations made in the framework of a macroeconomic simulation model. This model also shows that while the funded pillar of old-age pension provision is not entirely immune to population aging, it is not substantially threatened by a substantial decrease in stock market prices, the so-called "asset meltdown".

How an Unfunded Pension System looks like Defined Benefits but works like Defined Contributions: The German Pension Reform

This paper describes the German pension reform process 1992-2007 with a stress on a remark-able development: the public pay-as-you-go-financed pension system has almost silently moved from a traditional defined benefit system to a system which works in many respects like a defined contribution system. The paper combines economic with political considerations, hopefully offering a few lessons that are useful also for other countries.

Einkommen und Sterblichkeit in Deutschland : Leben Reiche länger?

Unterschiede in der Lebenserwartung nach Einkommen wurden bereits für viele Länder untersucht und empirisch belegt. Diese Diskrepanzen in der Lebenserwartung sind wirtschaftspolitisch und empirisch wichtig. Durch die kürzeren Rentenlaufzeiten von Versicherten in den untersten Einkommensgruppe resultieren unerwünschte Umverteilungseffekte in der gesetzlichen Rentenversicherung. Weiterhin ändern einkommensabhängige Mortalitätsraten die Interpretation empirischer Analysen über das Sparverhalten älterer Menschen. Eine Auswertung des Sozio-ökonomischen Panels zeigt, daß auch in Deutschland ein positiver Zusammenhang zwischen dem Einkommen und der Lebenserwartung von Männern und Frauen in der zweiten Lebenshälfte besteht. Männer und Frauen im untersten Viertel der Einkommensverteilung haben eine um etwa 6 bzw. 4 Jahre kürzere Lebenserwartung als Menschen im obersten Einkommensquartil. Dieser Einfluß bleibt auch bei Berücksichtigung zusätzlicher Bestimmungsfaktoren der Mortalität bestehen

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

Intergenerational support exchanges are of particular interest in Europe's ageing populations. 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

How an Unfunded Pension System looks like Defined Benefits but works like Defined Contributions: The German Pension Reform

This paper describes the German pension reform process 1992-2007 with a stress on a remark-able development: the public pay-as-you-go-financed pension system has almost silently moved from a traditional defined benefit system to a system which works in many respects like a defined contribution system. The paper combines economic with political considerations, hopefully offering a few lessons that are useful also for other countries.