The Crisis of Germany’s Pension Insurance System and How It Can Be Resolved

Sinn, Hans-Werner (1999): The Crisis of Germany’s Pension Insurance System and How It Can Be Resolved. Discussion Paper / Centre for Economic Policy Research (CEPR),

Abstract

The paper discusses the options for a reform of the German pension system using a model developed at CES for the German Council of economic advisors to the Federal Ministry of Economics and Research. It is argued that the German pay-as-you-go-system is efficient in a present value sense but will nevertheless need the support of a funded system to avoid a financial crisis. The paper recommends obligatory private savings at a variable rate where the time path of the savings rate is chosen so as to stabilize the sum of this rate and the pay-as-you-go contribution rate, given the time path of pensions as defined in the present system. ; Germany; Pay-As-You-Go System; Pension Insurance; Savings

• Item Type: Paper
• Faculties: Economics; Economics > Chairs > Chair for Public Economics
• Subjects: 300 Social sciences > 330 Economics
• Language: English