On the Fairness of Early-Retirement Provisions

Breyer, Friedrich; Hupfeld, Stefan

On the Fairness of Early-Retirement Provisions

Dateien

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Datum

2010

Autor:innen

Breyer, Friedrich

Hupfeld, Stefan

DOI (zitierfähiger Link)

https://doi.org/10.1111/j.1468-0475.2009.00464.x

Sammlungen

Wirtschaftswissenschaften

Publikationstyp

Zeitschriftenartikel

Publikationsstatus

Published

Erschienen in

German Economic Review. 2010, 11(1), pp. 60-77. ISSN 1465-6485. eISSN 1468-0475. Available under: doi: 10.1111/j.1468-0475.2009.00464.x

Zusammenfassung

A crucial parameter for increasing the retirement age is the early-retirement discount of the public pension system. Critics of the present German system argue that the downward adjustment of the pension for early retirees is too small compared with a ‘fair’ system and thus encourages early retirement. We discuss several notions of ‘fairness’ of early-retirement provisions and propose a concept called ‘distributive neutrality’, which states that the ratio between total benefits and total contributions should not depend systematically on the individual's ability. By applying this concept to the German retirement benefit formula and taking empirically estimated relationships between annual income (as a proxy for ability), life expectancy and retirement age into account, we show that at the present discount rate of 3.6% per year there is redistribution from low to high earners, which, surprisingly, could be attenuated by raising the discount rate.

Fachgebiet (DDC)

330 Wirtschaft

Zitieren

ISO 690

BREYER, Friedrich, Stefan HUPFELD, 2010. On the Fairness of Early-Retirement Provisions. In: German Economic Review. 2010, 11(1), pp. 60-77. ISSN 1465-6485. eISSN 1468-0475. Available under: doi: 10.1111/j.1468-0475.2009.00464.x

BibTex

@article{Breyer2010-02Fairn-33508,
  year={2010},
  doi={10.1111/j.1468-0475.2009.00464.x},
  title={On the Fairness of Early-Retirement Provisions},
  number={1},
  volume={11},
  issn={1465-6485},
  journal={German Economic Review},
  pages={60--77},
  author={Breyer, Friedrich and Hupfeld, Stefan}
}

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Universitätsbibliographie

Ja