Is There a Growing Risk of Old-Age Poverty in East Germany?

Stefan Krenz, Wolfgang Nagl and Joachim Ragnitz
Authors registered in the RePEc Author Service: Stefan Arent ()

Applied Economics Quarterly (formerly: Konjunkturpolitik), 2009, vol. 60, issue Supplement, 35-54

Abstract: Is old-age poverty becoming a serious problem in Germany? Long-term unemployment and increasing disruptions in employment biographies induce shrinking retirement arrangements. We analyze the income security through the statutory pension scheme, which is still the most important income source for pensioners. Therefore we develop a micro-simulation-model to compare the situation of new retirees in 2020–2022 to those in 2004–2006. We do this for the most common household-types in East and West Germany in respect to gender and education in order to find specific differences. For both parts of Germany education is the key to a sufficient statutory pension. The currently higher average pensions in East Germany will decrease over time. In general, the probability of old-age poverty increases. Our findings help to clarify the risk of post-retirement poverty for specific household constellations. Comment by Jürgen Schupp.

Keywords: statutory pension system; old-age poverty risk; pension distribution; micro-simulation model (search for similar items in EconPapers)
JEL-codes: I32 J11 J14 (search for similar items in EconPapers)
Date: 2009
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