Age and Cohort Effects in Saving and the German Retirement System

Axel Börsch-Supan

No 513, Discussion Papers from Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre

Abstract: As the public pay-as-you-go pension systems of the aging industrialized countries are likely to become seriously strained under the growing dependency burden, the question arises whether a society should rely on private savings to finance old-age consumption. This is an empirical question about the magnitude and the flexibility of saving rates. This paper argues that saving rates must increase in an unprecedented fashion in order to compensate for the dependency effect. The paper takes the German case as an example. It analyses saving behavior in Germany using three waves of the Income and Expenditure Survey. It separates age and cohort effects; computes the demographically induced change in the aggregate saving rate; and compares the magnitude of these excess savings with the increasing burden of the pension system. Finally, a macroeconomic simulation model is used to explore possible paths of the cohort effects in saving rates.

Date: 1995
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://madoc.bib.uni-mannheim.de/1061/1/513.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mnh:vpaper:1061

Access Statistics for this paper

More papers in Discussion Papers from Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre Contact information at EDIRC.
Bibliographic data for series maintained by Katharina Rautenberg ().