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Europe's Demographic Deficit

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  • Sinn, Hans-Werner

Abstract

Due to exceptionally low birth rates, the dynamism of Europe will be lagging behind that of other regions of the world for the time being. The paper assembles a rich body of comparative empirical data to clarify the extent of the demographic problems for the EU countries. It advances the view that the low birth rates in part result from early government interventions in terms of socializing the fruits of human capital investment via the pay-as-you-go pension system. To mitigate the extent of socialization, it considers a policy of freezing the contribution rates within the existing pensions systems, forcing the childless to save and providing an additional tax-financed "child pension" tax to parents.

Suggested Citation

  • Sinn, Hans-Werner, 2005. "Europe's Demographic Deficit," Munich Reprints in Economics 934, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:934
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    References listed on IDEAS

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    19. Hans-Werner Sinn & Martin Werding, 2000. "Rentenniveausenkung und Teilkapitaldeckung - ifo Empfehlungen zur Konsolidierung des Umlageverfahrens," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 53(18), pages 12-25, June.
    20. Hans-Werner Sinn & Martin Werding, 2001. "Immigration Following EU Eastern Enlargement," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 2(02), pages 40-47, October.
    21. Uebelmesser Silke, 2004. "Political Feasibility of Pension Reforms," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-24, September.
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    24. Isaac Ehrlich & Jinyoung Kim, 2005. "Social Security, Demographic Trends, and Economic Growth: Theory and Evidence from the International Experience," NBER Working Papers 11121, National Bureau of Economic Research, Inc.
    25. Alessandro Cigno & Martin Werding, 2007. "Children and Pensions," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262033690, December.
    26. Hans-Werner Sinn, 2000. "Why a Funded Pension System is Needed and Why It is Not Needed," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 7(4), pages 389-410, August.
    27. Cigno, Alessandro & Camillio Rosati, Furio, 1997. "Rise and fall of the Japanese saving rate: The role of social security and intra-family transfers," Japan and the World Economy, Elsevier, vol. 9(1), pages 81-92, March.
    28. Heikki Oksanen, 2002. "Pension reform: key issues illustrated with an actuarial model," European Economy - Economic Papers 2008 - 2015 174, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    29. Hans-Werner Sinn & Martin Werding, 2001. "Zuwanderung nach der EU-Osterweiterung: Wo liegen die Probleme?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 54(08), pages 18-27, May.
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    Cited by:

    1. Martin Werding, 2006. "Kinderrente und Vorsorgepflicht - der ifo-Vorschlag zur Lösung der demographischen Krise des Rentensystems," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 59(07), pages 44-53, April.
    2. Martin Werding, 2005. "Survivor Benefits and the Gender Tax Gap in Public Pension Schemes: Observations from Germany," CESifo Working Paper Series 1596, CESifo.
    3. Koen Caminada & Kees Goudswaard, 2008. "Revenue Effects of Tax Facilities for Pension Savings," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 36(2), pages 233-246, June.
    4. Marga Peeters & Loek Groot, 2012. "Demographic Pressure in the European Union," EERI Research Paper Series EERI_RP_2012_11, Economics and Econometrics Research Institute (EERI), Brussels.
    5. Jan Bonenkamp & Lex Meijdam & Eduard Ponds & Ed Westerhout, 2017. "Ageing-driven pension reforms," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(3), pages 953-976, July.
    6. Robert Fenge & Jakob von Weizsäcker, 2006. ""Generation Enkellos" und Rentenbeitragsrabatt für Eltern," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 59(05), pages 11-18, March.

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    More about this item

    Keywords

    pension system; birth rate; human capital; demography;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J1 - Labor and Demographic Economics - - Demographic Economics

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