| The German pension system is facing major challenges. Demographic change, which is increasingly skewing the ratio of contributors to pensioners, is creating ever greater pressure for reform. The baby boomer generation is retiring. At the same time, too few young people are entering the workforce to sustain pay-as-you-go pensions. The transformation of pensions is frequently discussed, but substantial adjustments have not yet been implemented.
With its focus on “Pension Planning”, the ZEW Monthly September 2023 takes a closer look at the possible solutions for stabilising pensions. ZEW researchers are currently investigating the role that private pension provision can play in closing potential pension gaps. The team examines the consequences of the COVID-19 pandemic and price increases on retirement provision, identifying a change in savings behaviour among women, and highlighting the merits of fluctuating payout plans.
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| | | | RESEARCH ON PENSION PLANNING | |
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↗ FINAL REPORT OF THE FOCUS GROUP ON PRIVATE PENSIONS
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| Professor Tabea Bucher-Koenen, head of ZEW’s “Pensions and Sustainable Financial Markets” Research Unit, is an expert in the Focus Group on Private Pensions. In the final report the Group recommends several measures to make private retirement provision more attractive, including the introduction of a subsidised retirement savings account, flexibility during the payout phase, targeted allowances, and a comparison platform with product information for both the savings and payout phases.
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| More about the final report
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↗ FLUCTUATING PENSIONS: GERMANS GENERALLY INTERESTED BUT STILL CAUTIOUS
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| When given the choice between different phased withdrawal plans, people in Germany are prepared to accept fluctuations in the payout of private pensions, especially if this improves the prospect of higher returns. According to a survey among more than 2,500 German citizens, a total of 40 per cent of respondents prefer phased withdrawal plans with medium risks (60 per cent stocks/40 per cent bonds) or high risks (100 per cent stocks). In reality, however, just 18.3 per cent of Germans invest in stocks.
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| More about the ZEW study
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↗ ALTERED SAVINGS BEHAVIOUR DUE TO PENSION REFORM
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| In 1999, a pension reform raised the retirement age for women from 60 to 63. This reform has had a significant – albeit individually variable – impact on the working lives of those affected. A recent study by ZEW Mannheim and the University of Mannheim reveals that women have been taking this reform into consideration early on and, as a result, save less and spend more money during their working years compared to before the pension reform. However, women born in 1952 or after still enjoy higher incomes during retirement.
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| More about the ZEW study
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| | ↗ EUROZONE INFLATION PROJECTIONS RECEDE
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| In the special question included in the ZEW Financial Market Survey in August 2023 the forecasts point to a gradual decrease in inflation over the upcoming years. However, the European Central Bank’s (ECB) inflation target is unlikely to be achieved until at least 2026. While many financial market experts continue to view wage trends in the eurozone with concern, the economic development is increasingly fostering expectations of declining inflation. For the year 2023, the experts do not anticipate any further significant interest rate hikes by the ECB. In 2024 and 2025, ECB interest rates are expected to fall gradually.
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| | | | CURRENT ZEW RESEARCH | |
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↗ FEDERALIST EDUCATION SYSTEM: POLITICIANS WORRY TOO MUCH ABOUT REPUTATION
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| Why is the federalist structure of the German education system deficient? More than 10,000 people and all members of the state parliaments were asked about the quality of the education policy in their state. The study shows that the proposal to increase transparency of educational performance meets a high level of approval among parliamentarians from better-performing federal states, while it meets with little approval among parliamentarians from low-performing federal states.
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| More about the ZEW study
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↗ HUMBOLDT FELLOW RESEARCHES DEFENCE EXPENDITURE AT ZEW
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| Humboldt Fellow Łukasz Olejnik, PhD has been conducting research at ZEW Mannheim since July 2023 as a visiting scholar in the ZEW Research Unit “Corporate Taxation and Public Finance” and will stay until the end of the year. The expert in political economy and fiscal policy hails from the SGH Warsaw School of Economics and the National Bank of Poland. His research stay at ZEW is funded by the Humboldt Research Fellowship for postdocs.
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| More about the stay of Łukasz Olejnik, PhD at ZEW
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↗ CHANGE AT THE HELM OF THE ZEW INDICATOR OF ECONOMIC SENTIMENT
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| How will the economy develop over the next six months? For over three decades, the ZEW Financial Market Survey has been gauging the sentiment among German financial experts on a monthly basis. Known as the ZEW Indicator of Economic Sentiment, it has become an eagerly awaited fixture by media and investors alike. As of 1 September 2023, Dr. Michael Schröder passed on the leadership of the ZEW Financial Market Survey, through which the ZEW Indicator of Economic Sentiment is conducted, to his successor, Dr. Alexander Glas.
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The economy is facing major upheavals. In an interview with Badische Zeitung (BZ), ZEW President Achim Wambach explains how climate protection and growth go together and why the challenges of structural change are particularly great in Baden-Württemberg: “Currently, the government is extending support to companies pivotal for the green transition and contemplating an industrial electricity price cap for energy-intensive enterprises. However, these measures fall short.”
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| Read the full interview
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| | | SCIENTIFIC QUALIFICATIONS IN COOPERATION WITH THE UNIVERSITY OF MANNHEIM
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| This summer semester, ZEW Mannheim again offered students in the PhD track the opportunity to attend summer courses taught by internationally renowned professors. More than 60 aspiring scholars from ZEW and the University of Mannheim attended the four courses on cutting-edge economic subjects, taking advantage of the opportunity for discussion and expanding their networks. The ZEW Summer Courses, financially supported by the state of Baden-Württemberg, are part of a close cooperation with the University of Mannheim as part of the PhD track of the Center for Doctoral Studies in Economics (CDSE).
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| | | | UPCOMING | |
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| | | EVALUATING EU COHESION POLICY: WHAT DO WE REALLY KNOW?
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| Based on the latest ZEW research of the Research Unit “Corporate Taxation and Public Finance”, this ZEW Lunch Debate on 18 October in Brussels will focus on the evaluation of Cohesion Policy, seeking answers to key questions. How impartial is the evaluation system and how developed are the methodological standards? Is there a discrepancy between scientific findings and evaluations conducted by beneficiary authorities and EU institutions? And how can the evaluation system be improved for the next Multiannual Financial Framework (MFF) to foster a greater focus on performance?
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| | | THE FUTURE OF FINANCIAL EDUCATION: AIMING FOR EFFECTIVITY, SUSTAINABILITY, AND INCLUSION
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| Financial education is on the rise and in many places it is receiving the attention it needs in view of the current challenges. But what does effective, sustainable, and inclusive financial education look like for all population groups? What content should be addressed, when, for whom and by whom? Which teaching-learning arrangements should be used? What educational policy and contextual conditions are needed? These and other questions on financial education of the future will be discussed at the 3rd MIFE Annual Conference on 20 November in Mannheim with high-ranking representatives from science, politics and practice.
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| | | | → CONTACT FOR QUESTIONS OR SUGGESTIONS ON THE CONTENT | |
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| | | ZEW – Leibniz Centre for European Economic Research
L7, 1 · 68161 Mannheim
Phone: +49 (0)621/1235-01
E-mail: zewmonthly@zew.de
Website: www.zew.de
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| | | Executive Directors:
Professor Achim Wambach, PhD; Thomas Kohl
Chair of the ZEW Supervisory Board:
Ministerial Director Dr. Hans Reiter
Registered Office: Mannheim
Local Court Mannheim HRB 6554
USt-IdNr.: DE188318292
Commitment to Data Protection
Detailed Legal Note
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