Anette Reil-Held

Saving incentives, old-age provision and displacement effects: evidence from the recent German pension reform

In response to population aging, pay-as-you-go pensions are being reduced in almost all developed countries. In many countries, governments aim to fill the resulting gap with subsidized private pensions. This paper exploits the recent German pension reform to shed new light on the uptake of voluntary, but heavily subsidized private pension schemes. Specifically, we investigate how the uptake of the recently introduced ‘Riester pensions’ depends on state-provided saving incentives, and how well the targeting at families and low-income households works in practice. We show that, after a slow start, private pension plans took off very quickly. While saving incentives were effective in reaching parents, they were less successful in attracting low-income earners, although Riester pensions exhibit a more equal pattern by income than occupational pensions and unsubsidized private pension plans. We also provide circumstantial evidence on displacement effects between saving for old-age provision and other purposes. Households who plan to purchase housing are less likely to have a Riester pension. The same holds for households who attach high importance to a bequest motive. Occupational pensions and other forms of private pensions, however, act as complements rather than as substitutes.

How Much Is Transfer and How Much Is Insurance in a Pay-As-You-Go System? The German Case

Pay-as-you-go pension systems provide insurance against longevity-related old-age poverty and related risks. They are commonly also used as instruments for redistribution. This paper provides several estimates of the insurance and transfer share of the German public pension system. Estimating these shares is important because they are indicative of taxation-related deadweight losses and influence public acceptance of the pension system. We also disentangle intragenerational from intergenerational transfers. Although our estimate of intragenerational transfers is smaller than recent semi-official estimations, such transfers create substantial deadweight losses. Intergenerational transfers are much larger, thereby contributing to strong negative participation incentives for the younger generation. Copyright 2001 by The editors of the Scandinavian Journal of Economics.

Bequests and Aggregate Wealth Accumulation in Germany

This paper estimates the proportion of current wealth in Germany which is generated by intergenerational bequests. It begins with the flow-of-bequests approach which cumulates annual flows of bequests into a stock of transfer wealth. Assuming exponential growth of the economy, inherited wealth accounts for about 35 per cent of total wealth in Germany, a figure comparable to that obtained for other countries. However, the assumptions underlying this estimate are inappropriate for Germany, because they fail to take account of the special circumstances of the postwar period. Modifying the flow-of-bequests method to allow for these special circumstances reduces the share of inherited wealth to about 10 per cent, surprisingly low in comparison to other countries.To confirm this result, a further method was developed based on a regression model of wealth as a function of socio-economic variables. The wealth of the nation is estimated with bequests included, and the contribution of bequests is then calculated by setting bequests equal to zero. This result again produces a share of about 10 per cent for inherited wealth, making this figure the most plausible value for Germany in the 1980s. However, the share can be expected to increase in future.

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

Dieser Beitrag behandelt den Ubergang vom Arbeitsmarkt in den Ruhestand und die Einkommenslage von Rentnerhaushalten in Deutschland. Wir stutzen unsere empirische Analyse auf das Sozio-okonomische Panel, die Einkommens- und Verbrauchsstichprobe 1993 und Daten der gesetzlichen Rentenversicherung. In einer empirische Untersuchung von Rentenzugang und Erwerbsbeteiligung alterer Menschen zeigen wir, wie sehr Ruhestand und Rentenbezug auseinanderfallen. Zum einen erfolgt oftmals ein Ausstieg aus dem Erwerbsleben, lange bevor eine Rente bezogen wird. Zum anderen ist die Phase des Rentenbezugs sehr haufig mit weiterer Erwerbstatigkeit verbunden, was sich in Entwicklung und Zusammensetzung der Rentnereinkommen widerspiegelt. Die Einkommenslage des uberwiegenden Teils der Rentnerhaushalte ist gesichert: Armut ist heute kein spezifisches Problem der Alteren mehr, wie sich auch an dem Sozialhilfebezug erkennen last. Fur Personen mit geringen Arbeitseinkommen oder kurzen Erwerbshistorien konnen sich jedoch Renteneinkommen ergeben, die unter dem Sozialhilfeniveau liegen. Betroffen hiervon sind in erster Linie Frauen. In der Zukunft wird sich die relative Lage von alteren Frauen durch die gestiegene Erwerbsbeteiligung weiter verbessern. Die aufgrund der demographischen Entwicklung zu erwartende Senkung der Ersatzquote wird zwar die relative Einkommensposition von Rentnerhaushalten schwachen, doch konnte dies durch private Ersparnis, erhohte Erwerbsbeteiligung und spatere Verrentung kompensiert werden.