Gesetzliche Rentenversicherung: Prognosen im Vergleich

Hans-Werner Sinn and Marcel Thum

FinanzArchiv: Public Finance Analysis, 1999, vol. 56, issue 1, 104-140

Abstract: How will the contribution rates to the German social security system develop over the next 40 years? While some observers predict only a minor increase from 21 percent today to 24 percent in 2040, others foresee a dramatic increase - to levels even above 30 percent. Using the the reports of the Sozialbeirat (social council), the Prognos AG and the Council of Economic Advisors of the Ministry of Economics (CES forecast), we show where the major differences between 'optimistic' and 'pessimistic' projections can be found. A large part of this difference in the predicted contribution rates is due to the varying assumptions made about the future development of the tax system and the rest of the social insurance system. Calculating the total burden on labor income we show that the seemingly optimistic predictions of the Sozialbeirat and the Prognos AG are truly pessimistic scenarios. The total burden on labor income imposed by taxes and social insurance contributions is much higher in theses scenarios than in the projection of the Council of Economic Advisors.

Date: 1999
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Working Paper: Gesetzliche Rentenversicherung: Prognosen im Vergleich (1999)
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