TY  - JOUR
AU  - Borsch-Supan, Axel
AU  - Schnabel, Reinhold
TI  - Social Security and Retirement in Germany
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6153
PY  - 1997
Y2  - August 1997
DO  - 10.3386/w6153
UR  - http://www.nber.org/papers/w6153
L1  - http://www.nber.org/papers/w6153.pdf
N1  - Author contact info:
Axel H. Börsch-Supan
Munich Center for the Economics of Aging
Max Planck Institute
for Social Law and Social Policy
Amalienstrasse 33
80799 Munich
GERMANY
Tel: +49 (89) 3860-2355
Fax: 49 (89) 3860-2390
E-Mail: boersch-supan@mea.mpisoc.mpg.de

Reinhold Schnabel
Prof. Reinhold Schnabel
University Duisburg-Essen
Universitaetsstr. 12
45117 Essen
Germany
Tel: (+49)201 183 4125
Fax: (+49)201 183 3417
E-Mail: Reinhold.Schnabel@uni-due.de
M1  - published as Axel Borsch-Supan, Reinhold Schnabel. "Social Security and Retirement in Germany," in Jonathan Gruber and David A. Wise, editors, "Social Security and Retirement around the World" University of Chicago Press (1999)

AB  - This paper describes the German public old age social security program (,Gesetzliche Rentenversicherung') and its incentive effects on retirement decisions.  The paper presents the key features of the system and expresses retirement incentives in the form of accrual rates of social security wealth and implicit tax rates on earnings.  It summarizes labor market behavior of older persons in Germany during the last 35 years and surveys the empirical literature on the effects of the social security system on retirement in Germany. The paper shows that even after the 1992 reform the German system is actuarially unfair.  This generates a substantial redistribution from late to early retirees and creates incentives to early retirement.  Indeed, average retirement age is very low in West Germany (about age 59) and even lower in East Germany. This tendency towards early retirement is particularly hurting in times of population aging when the German social security contribution rate is expected to increase dramatically and will substantially exceed the rates in other industrialized countries.
ER  -