<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>German pension policy faces a dilemma. If it is too generous, it harms contributors, disincentivises labour supply, and crowds out education and infrastructure investment needed to pay for social protection. If it is too frugal, it harms those with social and health issues. Thus, smart compromises are required rather than maximum demands. We propose a policy mix with five elements: 1) determine the pension level in a sustainable and generation-appropriate way; 2) link retirement age to life expectancy; 3) limit early retirement to those in poor health; 4) abolish mandatory retirement; 5) encourage a mix of pay-as-you-go and funded occupational pensions.</p>
</abstract>

German pension policy faces a dilemma. If it is too generous, it harms contributors, disincentivises labour supply, and crowds out education and infrastructure investment needed to pay for social protection. If it is too frugal, it harms those with social and health issues. Thus, smart compromises are required rather than maximum demands. We propose a policy mix with five elements: 1) determine the pension level in a sustainable and generation-appropriate way; 2) link retirement age to life expectancy; 3) limit early retirement to those in poor health; 4) abolish mandatory retirement; 5) encourage a mix of pay-as-you-go and funded occupational pensions.

Pension Policy After the Budget Verdict: No Maximum Demands

Wirtschaftsdienst

This work is licensed under the Creative Commons Attribution 4.0 International License.

Rentenpolitik nach dem Haushaltsurteil: keine Maximalforderungen

German pension policy faces a dilemma. If it is too generous, it harms contributors, disincentivises labour supply, and crowds out education and infrastructure...

Pension Policy After the Budget Verdict: No Maximum Demands

Online veröffentlicht: 22. Feb. 2024

Seitenbereich: 102 - 105

DOI: https://doi.org/10.2478/wd-2024-0032

© 2024 Axel Börsch-Supan et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.