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

Hans-Werner Sinn

No 2175, CEPR Discussion Papers from Centre for Economic Policy Research

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.

Keywords: Germany; Pay-As-You-Go System; Pension Insurance; Savings (search for similar items in EconPapers)
JEL-codes: H55 (search for similar items in EconPapers)
Date: 1999-06
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Citations: View citations in EconPapers (10)

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Working Paper: The Crisis of Germany's Pension Insurance system and How it Can be Resolved (1999)
Working Paper: The Crisis of Germany's Pension Insurance System and How It Can Be Resolved (1999)
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