Maintaining One's Living Standard at Old Age: What Does that Mean? Evidence Using Panel Data from Germany

Christian Dudel, Notburga Ott and Martin Werding

No 4223, CESifo Working Paper Series from CESifo

Abstract: How much retirement income is needed in order to maintain one’s living standard at old age? As it is difficult to find a firm basis for an empirical treatment of this question, we employ a novel approach to assessing an adequate replacement rate vis-à-vis income in the pre-retirement period. We subject indications regarding satisfaction with current income as collected in the German Socio-Economic Panel (GSOEP) to longitudinal analyses, using linear fixed-effects models and fixed-effects ordered logit models as our main analytical tools. We obtain a required net replacement rate of about 87% for the year of entry into retirement as a rather robust result, while replacement rates keeping the living standard unchanged may slightly decline over the retirement period.

Keywords: retirement; living standard; replacement rate; pensions; saving; satisfaction (search for similar items in EconPapers)
JEL-codes: D10 D91 H55 J32 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (6)

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Working Paper: Maintaining One's Living Standard at Old Age - What Does That Mean?: Evidence Using Panel Data from Germany (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_4223

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