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Ageing, Policies and Inequalities

RN01S02

Thu 27. 8.  16:00 - 17:30
room FA 203

Does Ageing Cause More Inequality in Germany?

RN01

Stöver, Britta; Drosdowski, Thomas; Wolter, Marc Ingo
GWS, Germany

In Germany, demographic change and ageing is mainly seen negatively. The perception is dominated by issues such as labour force shortage, instability of the pension system or exploding costs for the health care system to name only few. With regard to private households, poverty among the elderly, inter-generation fairness or the wealthy prime agers are frequently mentioned. However, it is not entirely clear whether the distribution of income will become less fair and poverty among the elderly will be a severe problem of many households. The aim of this contribution is to answer the following questions: What are the pensioner households’ income composition characteristics? How will their income develop until 2030? What does it mean for the income distribution among all households and the social (in)equality? To answer these questions, different sources of income for different types of households are projected until 2030 applying the macro-econometric input-output model INFORGE in combination with the socio-economic household module DEMOS. The data for the socio-economic module on households and their specific income situation are taken from the Households Budget Survey provided by the German Federal Statistical Office. The socio-economic modelling approach and the projection results are based upon a research project commissioned by the Federal Ministry of Education and Research, called soeb3 (Sozioökonomische Berichterstattung, Reporting on socioeconomic development, http://www.soeb.de/en/). The results of the analysis will comprise insights into the future level and structure of household income, especially pensioner’s income. Further, conclusions on the income distribution and on social inequality are drawn. We expect the results on the total effect of ageing on inequality to be ambiguous. Shortages on the labour market will lead to comparably high wage raises that will not translate into an equally high increase in pension payments. As a consequence, pensioner households will be faced with slower income growth than other household types which will increase income differences. Simultaneously, the share of pensioner households in all household types will grow giving their income more weight in the average income. The (negative) distance of the pensioner households’ income to the average income will decline. This could be interpreted as a reduction of inequality.