Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/26283
Authors: 
Fehr, Hans
Habermann, Christian
Year of Publication: 
2008
Series/Report no.: 
CESifo working paper 2238
Abstract: 
The present paper studies the growth, welfare and efficiency consequences of the recent introduction of tax-favored retirement accounts in Germany in a general equilibrium overlapping generations model with idiosyncratic lifespan and labor income uncertainty. We focus on the implicit differential taxation of specific savings motives, the mandatory annuitization of benefits and the impact of special provisions for low-income households. The simulations indicate that the reform improves overall economic efficiency by about 0.6 percent of aggregate resources, but welfare decreases significantly for future generations. Finally, we show that special provisions could be very effective in raising the participation of low-income households despite their low budgetary cost.
Subjects: 
individual retirement accounts
annuities
stochastic general equilibrium
JEL: 
H55
J26
Document Type: 
Working Paper

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