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Social security and intergenerational redistribution: A generational accounting perspective

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Abstract

This paper is concerned with the analysis of intergenerational redistribution in a pay-as-you-go financed social security scheme. Instead of annual fiscal indicators, we apply generational accounts to calculate the intertemporal effects arising from a projected aging process. As a case study, the institutional settings and the parameterization of our model refer to the conditions found in Germany in 1989. Additionally, the intergenerational impacts of the German 1992 Pension Reform Act are taken into account. Our findings suggest that the major reform measures affect the distribution of the demographic burden between future and presently living generations. However, the burden is shifted in favor of the generations currently alive, thereby contradicting the explicit political intentions and aggravating the situation for future generations.

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Authors and Affiliations

  1. Institute of Public Finance and Social Policy, Christian-Albrechts-University of Kiel, Olshausenstr. 40, D-24098, Kiel, Germany

    Stephan Boll, Bernd Raffelhüschen & Jan Walliser

Authors
  1. Stephan Boll
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  2. Bernd Raffelhüschen
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  3. Jan Walliser
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Additional information

We would like to thank two anonymous referees and the participants of the Euresco conference on ‘The Economics of Aging’, 10–15 October 1992, San Feliu de Guixols, Spain, for their helpful comments.

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Boll, S., Raffelhüschen, B. & Walliser, J. Social security and intergenerational redistribution: A generational accounting perspective. Public Choice 81, 79–100 (1994). https://doi.org/10.1007/BF01053267

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