Measuring Intra-Generational Redistribution in PAYG Pension Schemes

25 Pages Posted: 15 Apr 2020

See all articles by Jonas Klos

Jonas Klos

Fraunhofer Gesellschaft - Fraunhofer Institute for Applied Information Technology (FIT)

Tim Krieger

University of Freiburg - Department of Economics

Sven Stöwhase

Fraunhofer Gesellschaft - Fraunhofer Institute for Applied Information Technology (FIT)

Date Written: 2020

Abstract

In this paper, we propose a novel index for measuring intra-generational redistribution in pay-as-you-go pension schemes. Our index solely requires information on contributions and pension benefits of retirees, enabling us to measure intra-generational redistribution isolated from possible inter-generational redistribution. We use contribution records of approx. 100,000 German individuals, who progressed into retirement in 2007-2015, to measure the level of intra-generational redistribution in the German statutory pension scheme (GRV). A recent reform of childcare benefit provision, which became effective in 2014, confirms the predictions of our index. The reform introduced additional benefits for a subgroup of substantial size of German mothers, due to which the index value for women, but not for men jumps up. Our findings suggests that GRV fulfils the ideal of a Bismarckian pension system without intra-generational redistribution for men, while women benefit from intra-generational redistribution.

Keywords: PAYG pension systems, intra-generational redistribution, Beveridge vs. Bismarck, index, microdata, Germany

JEL Classification: H550, D310, C550

Suggested Citation

Klos, Jonas and Krieger, Tim and Stöwhase, Sven, Measuring Intra-Generational Redistribution in PAYG Pension Schemes (2020). CESifo Working Paper No. 8200, Available at SSRN: https://ssrn.com/abstract=3571906 or http://dx.doi.org/10.2139/ssrn.3571906

Jonas Klos (Contact Author)

Fraunhofer Gesellschaft - Fraunhofer Institute for Applied Information Technology (FIT) ( email )

Sankt Augustin
Germany

Tim Krieger

University of Freiburg - Department of Economics ( email )

University of Freiburg
Wilhelmstr. 1b
Freiburg, D-79085
Germany

HOME PAGE: http://www.wguth.uni-freiburg.de

Sven Stöwhase

Fraunhofer Gesellschaft - Fraunhofer Institute for Applied Information Technology (FIT) ( email )

Sankt Augustin
Germany

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