Pension Reform During the Demographic Transition

The Scandinavian Journal of Economics, Vol. 102, Issue 3, September 2000

Posted: 18 Aug 2001

See all articles by Hans Fehr

Hans Fehr

University of Würzburg - Institute of Economics and Social Sciences

Abstract

The aim of this paper is to quantify the welfare effects of some currently discussed pension reform proposals in Germany. The analysis is based on an extended overlapping-generations model which accounts for intra-generational heterogeneity, rising life expectancy and declining fertility. Given a baseline path of the economy under the existing unfunded pension system, the model calculates the macroeconomic impact as well as the distributional and efficiency effects of various pension reform measures aimed at reducing the level of the future unfunded pension system. Simulations reveal that pension reforms cannot be evaluated solely in terms of inter- and intra-generational equity. Substantial efficiency gains or losses might arise if the linkage between contributions and benefits is improved or weakened.

Suggested Citation

Fehr, Hans, Pension Reform During the Demographic Transition. The Scandinavian Journal of Economics, Vol. 102, Issue 3, September 2000, Available at SSRN: https://ssrn.com/abstract=247659

Hans Fehr (Contact Author)

University of Würzburg - Institute of Economics and Social Sciences ( email )

Sanderring 2
D-97070 Wuerzburg
Germany
0931- 31 29 72 (Phone)
0931- 888 71 29 (Fax)

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