The research unit Old-Age Provision and Social Policy focuses on pension systems, retirement behavior and labor force participation. It is the closest unit to actual policy – especially to public pension policy in Germany. It studies the reform process towards a demographically more stable multi-pillar public pension system and its recent backlashes in Germany. The unit is also interested in how these reforms affect financial and health inequalities and how they affect other insurance programs, for instance, those for unemployment, disability and long-term care.
We use a detailed simulation model (MEA-PENSIM) to analyze policy reforms of the German public pension system. MEA-PENSIM is one of the few non-government pension simulation models that allow for the simulation of the future development of the German public pension system. It considers the current population structure and allows for different alternative demographic and labor market scenarios. Despite the complexity of the model, it is easy to handle so that alternative and counterfactual reform options can be easily implemented to analyze their consequences at relatively short notice.
The unit also exploits survey data (e.g. SHARE and the record-linked SHARE-RV data) as well as administrative data from the German pension insurance to monitor household’s reactions to pension reforms. For instance, expectation formation, retirement behavior, and adaption of savings behavior are topics on which the unit is researching.
A second pillar of the research unit is its work on international comparisons. Together with Courtney Coile and under the auspices of the National Bureau of Economic Research (NBER) in Cambridge, Mass. (USA), MEA has taken the lead of the International Social Security project, formerly led by Jon Gruber and David Wise. The collaboration of research teams from 12 countries currently focuses on the effect of pension reforms on labor force participation. In the first step, the effect on the average worker was studied, while now income inequality within the pension system and how it was affected by these reforms has become the focus of the project. Afterwards, it is planned that the project will focus on reform-induced health inequalities.
Further current projects of the unit include labor force participation of women in Germany as part of the BB-Future project funded by the European Commission.
Another important project of the Social Policy unit is the analysis of the short and long-term effects of short time employment aid (e.g., wage subsidies such as the “Kurzarbeitergeld” in Germany) during the Corona pandemic as part of the SHARE-COVID19 project funded by the European Commission., Finally, the unit studies saving behavior in Europe, the US and Singapore in an international comparison of 30 countries.
- Demographic Development
- Retirement Behavior and Labor Force Participation
- Policy Evaluation
- Pension Policy and Pension Forecast
- Applied Economics