Crowding out or crowding in? Public and private transfers in Germany

Reil-Held, Anette

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URL:	https://ub-madoc.bib.uni-mannheim.de/1261
URN:	urn:nbn:de:bsz:180-madoc-12615
Document Type:	Working paper
Year of publication:	2005
The title of a journal, publication series:	MEA Discussion Papers
Volume:	072
Place of publication:	Mannheim
Edition:	Version Juni 2005
Publication language:	English
Institution:	School of Law and Economics > Sonstige - Fakultät für Rechtswissenschaft und Volkswirtschaftslehre
MADOC publication series:	Veröffentlichungen des MEA (Mannheim Research Institute For the Economics of Aging) > MEA Discussion Papers
Subject:	330 Economics
Subject headings (SWD):	Deutschland , Alter , Transferzahlung
Abstract:	Intergenerational support exchanges are of particular interest in Europe's ageing populations. This paper focuses on the relationship between private and public financial transfers to and from the elderly. Based on German data we find that the giving of private transfers is influenced by public transfers. The close link between public transfers to the elderly and the financial support they give to others represents an inefficient backflow of pay-as-you-go financed pensions to the young generation. This mechanism can be interpreted as a private compensation device for the generations. We can also show that at the same time the receipt of public transfers by the elderly crowd-out private financial support they would have received otherwise in the German welfare state.