Working Paper

Pensions and the Path to Gerontocracy in Germany

by Hans-Werner Sinn and Silke Uebelmesser


Contents: [ Abstract | Download | Contact]

• Abstract
  
  An impending demographic crisis in Germany calls for fundamental reforms of the pension system. In a democracy, however, reforms require the support of the majority of the electorate. To determine whether the majority is in favour of reforms of the pension system, we calculate for each year the ‘‘indifference age’’ as the age of the cohort that is not affected by the reform and the ‘‘median age’’ as the age of the politically decisive cohort. Until 2016, a reform can be democratically enforced. After 2016, Germany will be a gerontocracy.

  JEL-Classification: H55

  Keywords: Demographic crisis; Pension reform; Political feasibility; Median age; Indifference age

  
  

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• Contact
  
  Silke Uebelmesser
  University of Munich, Department of Economics, CES, Schackstr. 4, 80539 Munich, Germany,
  eMail: uebelmesser@lmu.de

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