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The Fiscal Impact of Population Aging in Germany

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  • Fanny Annemarie Kluge

Abstract

Previous studies have shown that population aging has severe consequences for public spending. However, in welfare states with a federal budget structure, population aging will affect the levels of government to differing degrees. This article focuses on the impact of population aging on the fiscal system of the Federal Republic of Germany. The analysis draws upon profiles for public transfer flows by single years of age to illustrate the impact of age structure changes on the cost and revenue structures at the different levels of government. The results show that Länder and local governments are likely to achieve cost reductions while the federal budget and social security will face higher expenditures because of the increasing number of elderly people. This study provides valuable information on the age utilization of public flows and on the need for restructuring the allocation rules for government revenues and expenditures across levels of government.

Suggested Citation

  • Fanny Annemarie Kluge, 2013. "The Fiscal Impact of Population Aging in Germany," Public Finance Review, , vol. 41(1), pages 37-63, January.
    • Handle: RePEc:sae:pubfin:v:41:y:2013:i:1:p:37-63
    DOI: 10.1177/1091142112439225
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    References listed on IDEAS

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    1. Fanny A. Kluge, 2009. "Transfers, consumption and income over the lifecycle in Germany," MPIDR Working Papers WP-2009-014, Max Planck Institute for Demographic Research, Rostock, Germany.
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    10. Ragnitz, Joachim, 2005. "Demographische Entwicklung in Ostdeutschland und Länderfinanzausgleich," Wirtschaft im Wandel, Halle Institute for Economic Research (IWH), vol. 11(3), pages 73-81.
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    Cited by:

    1. Ilya Kashnitsky & Joop De Beer & Leo Van Wissen, 2020. "Economic Convergence In Ageing Europe," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 111(1), pages 28-44, February.
    2. T. Lehnert & O. H. Günther & A. Hajek & S. G. Riedel-Heller & H. H. König, 2018. "Preferences for home- and community-based long-term care services in Germany: a discrete choice experiment," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(9), pages 1213-1223, December.

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