The likely impact of the German pension system on old-age poverty : A look at the reform of 1992, 2001 and 2004

Details

Supervisors

Vandenberghe, Vincent

Faculty

Faculté des sciences économiques, sociales, politiques et de communication

Degree label

Master [120] en sciences économiques, orientation générale, à finalité spécialisée

Abstract

To reestablish financial stability and trust in the statutory PAYG system, the German government introduced some reforms from the early 90s till the mid-2000s. More precisely, in this paper, the reform of 1992, 2001 and 2004/2005 are discussed. The reforms aim to re-establish the financial stability of the statutory pension insurance but might also have other consequences, such as lower the standard of living of some elders and cause a resurgence of old-age poverty. The goal of this paper is to determine if and how the different reforms in Germany affected old-age poverty and, in particular, to discuss which dimensions of these reforms could have had such an effect. The main strategy to answer that research question is analysing micro-data on disposable income from the German Socio-Economic Panel (SOEP), covering the period 1984 to 2020. I performed a basic treatment-effect analysis using ‘generalized least-squares’ (GLS) regression and also the ‘difference in difference’ method. My main finding is that the reforms did not cause a significant rise of old-age poverty. However, the precise channels that have contributed to that result remain unclear, even after the analysis.