Citation

Discussion Paper Details

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Title: The Crisis of Germany's Pension Insurance System and How It Can Be Resolved

Author(s): Hans-Werner Sinn

Publication Date: June 1999

Keyword(s): Germany, Pay-As-You-Go System, Pension Insurance and Savings

Programme Area(s): Public Economics

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.

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Bibliographic Reference

Sinn, H. 1999. 'The Crisis of Germany's Pension Insurance System and How It Can Be Resolved'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=2175