Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/215808
Authors: 
Schön, Matthias
Year of Publication: 
2020
Series/Report no.: 
Bundesbank Discussion Paper No. 22/2020
Abstract: 
This paper presents long term projections of the German pension system that are based on a general equilibrium model with overlapping generations (OLG). This framework takes into account the two way feedback of both micro and macroeconomic relationships, meaning that households, for example, react to changes in the statutory pension system, such as the retirement age or the replacement rate. Changes in households' behaviour, in turn, impact on macroeconomic developments and public finances. One approach to parametrically reform the pension system would be linking (indexing) the retirement age systematically to increasing life expectancy. The model shows that the resulting increase in employment would also bolster social security contributions and taxes. Moreover, with a rising retirement age and the associated longer periods of work, pension entitlements would increase.
Subjects: 
Demographic Change
Pension System
OLG Models
JEL: 
E27
E62
H55
J11
J26
ISBN: 
978-3-95729-703-7
Document Type: 
Working Paper

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