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Financing Social Security: Simulating Different Welfare State Systems for Germany

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  • Dieckhoener, Caroline

    (University of Cologne)

  • Peichl, Andreas

    (Ludwig-Maximilians-Universität München)

Abstract

In Germany, there is an ongoing debate about how to increase the efficiency of the social security system and especially its financing. The aim of this paper is to simulate different financing systems for Germany. The introduction of a Liberal British or the Southern Greek financing system increases inequality and poverty, as well as labour supply incentives. The introduction of the Social-democratic Danish financing system decreases inequality of incomes, but does not necessarily lead to less poverty. Tax payments are extremely high, whereas social contribution payments are relatively low leading to mixed incentives effects.

Suggested Citation

  • Dieckhoener, Caroline & Peichl, Andreas, 2009. "Financing Social Security: Simulating Different Welfare State Systems for Germany," IZA Discussion Papers 4135, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp4135
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    Cited by:

    1. Tyrowicz, Joanna, 2020. "Are incentivized old-age savings schemes effective under incomplete rationality?," VfS Annual Conference 2020 (Virtual Conference): Gender Economics 224526, Verein für Socialpolitik / German Economic Association.
    2. Joanna Tyrowicz & Krzysztof Makarski & Artur Rutkowski, 2020. "Fiscal incentives to pension savings – are they efficient?," Working Paper series 20-06, Rimini Centre for Economic Analysis.

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    More about this item

    Keywords

    social security; welfare states; comparative analysis; EUROMOD;
    All these keywords.

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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