Maintaining one’s living standard at old age: What does that mean?

Christian Dudel (), Notburga Ott () and Martin Werding
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Christian Dudel: Ruhr-Universität Bochum
Notburga Ott: Ruhr-Universität Bochum

Empirical Economics, 2016, vol. 51, issue 3, No 18, 1279 pages

Abstract: 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 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; Satisfaction (search for similar items in EconPapers)
JEL-codes: D91 H55 J32 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s00181-015-1042-8

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