Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/226363
Authors: 
Schön, Matthias
Year of Publication: 
2020
Series/Report no.: 
Bundesbank Discussion Paper No. 57/2020
Abstract: 
The currently observed demographic change consists of two independent develop-ments that differ in structure and persistence: (1) A slow, monotonic and (presum-ably) permanent ageing effect caused by an increasing life expectancy; (2) a morerapidly changing, non-monotonic and less permanent cohort effect caused by fluc-tuations in the size of cohorts. This paper shows the ageing effect has a positiveimpact on the rates of return households generate within pay-as-you-go (PAYG) pension system. The cohort effect, by contrast, results in winners and losers in PAYG systems. Taking Germany as an example and using a quantitative OLG model the paper shows that the two effects cause rate of return differentials withinthe pension system of almost 1.3 percentage points between generations.
Subjects: 
Demographic Change
Pension System
OLG Models
JEL: 
E27
E62
H55
J11
J26
ISBN: 
978-3-95729-785-3
Document Type: 
Working Paper

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