TY  - JOUR
AU  - Sinn,Hans-Werner
AU  - Uebelmesser,Silke
TI  - When Will the Germans Get Trapped in their Pension System?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8503
PY  - 2001
Y2  - October 2001
UR  - http://www.nber.org/papers/w8503
L1  - http://www.nber.org/papers/w8503.pdf
N1  - Author contact info:
Hans-Werner Sinn
Ifo Institute -
Leibniz Institute for Economic Research
at University of Munich
Poschingerstr. 5
81679 Munich
GERMANY
Tel: 49-89-21802748
Fax: 49-89-397303;49-89-8506434 (home)
E-Mail: sinn@ifo.de
AB  - The upcoming demographic crisis in Germany demands fundamental reforms of the pension system. In a democracy, reforms are, however, only feasible when they are supported by the majority of the electorate. To determine whether the majority is in favor of reforms of the pension system, we calculate for each year the 'indifference age' as the age of the cohort which is not affected by the reform and the 'median age' as the age of the politically decisive cohort. Until 2023, the median age is below the indifference age implying that the young have the majority and the reform can be democratically enforced. After 2023, Germany will be characterized by a gerontocratic system where the old decide over the young. Only the fear that the young might emigrate   and perhaps a certain altruistic attitude towards their own descendants   will prevent the old from exploiting the young.
ER  -