How do they shape the German wealth distribution?

This paper uses SOEP data to study the distributional e ect of intergenerational trans- fers on the wealth distribution of German households. Similar to most other central Eu- ropean countries, Germany is likely to face a period of increasing aggregate bequest ows. At the same time, there is an ongoing debate on the distributional implications of such wealth shocks. This study adds to the discussion by providing causal estimates for the e ect of transfer receipt on the savings behavior of households. The model allows for dynamic adjustment and variations in the savings behavior over the wealth distribution. I use the estimates to decompose the overall e ect of transfers on wealth inequality in the e ect of the aggregated transfer volume, the transfer incidence over the wealth distribution and the e ect of the savings behavior. The results are very much in line with the literature, indicating that transfers tend to equalize wealth inequality, despite minor variations in the savings behav- ior over the wealth distribution and despite a strong relationship between initial household wealth and transfer accrual

Measuring ageing and the need for longer working lives in the EU. CEPS Working Document No. 417/February 2016 Wednesday, 24 February 2016

This study considers different ways of measuring the ageing of societies and their implications for public policy. The first part characterises the ongoing ageing of the population in the EU28 by relating it to past and future longer-term demographic trends for broad groups of countries. It goes beyond traditional chronological measures to include recently suggested prospective measures of ageing. The second part of the study is concerned with economic dependency ratios; a more relevant measure for summarising the economic challenges related to ageing. Three main findings emerge: first, prospective indicators of ageing reveal the challenge of population ageing to be less onerous than traditional chronological measures would suggest. Their relevance, however, will depend on the degree to which policy changes can respond to the changing age structure of the population. Second, substantial increases in the length of working lives are necessary to maintain current economic dependency ratios. Taking a year-2000 perspective view of the economic challenges of ageing shows that substantial progress has been made. Third, looking towards 2050, education will have limited direct impact on the scale of the ageing challenge

Measuring Dependency Ratios using National Transfer Accounts. CEPS Working Document No. 420/April 2016

It is now widely recognised that the socio-economic changes that ageing societies will bring about are poorly captured by the traditional demographic dependency ratios (DDRs), such as the old-age dependency ratio that relates the number of people aged 65+ to the working-age population. Future older generations will have increasingly better health and are likely to work longer. By combining population projections and National Transfer Accounts (NTA) data for seven European countries, we project the quantitative impact of ageing on public finances until 2040 and compare it to projected DDRs. We then simulate the public finance impact of changes in three key indicators related to the policy responses to population ageing: net immigration, healthy ageing and longer working lives. We do this by linking age-specific public health transfers and labour market participation rates to changes in mortality. Four main findings emerge: first, the simple old-age dependency ratio overestimates the future public finance challenges faced by the countries studied – significantly so for some countries, e.g. Austria, Finland and Hungary. Second, healthy ageing has a modest effect (on public finances) except in the case of Sweden, where it is substantial. Third, the long-run effect of immigration is well captured by the simple DDR measure if immigrants are similar to the native population. Finally, increasing the length of working lives is central to addressing the public finance challenge of ageing. Extending the length of working lives by three to four years over the next 25 years – equivalent to the increase in life expectancy – severely limits the impact of ageing on public transfers

How Inheritances Affect Retirement Plannings

This study uses the German SAVE panel study in order to estimate the effect of intergenerational transfers on the expected retirement entry age of individuals. The literature in this field typically estimates the transfer effect on the actual retirement probability. We suggest to base the analysis on the expected retirement age instead. This entails two methodological advantages: First, it is possible to exploit the within individual variation for the entire sample (even of those who do not retire) and thereby permits to analyze the life-cycle considerations of younger age groups. Second, the effect size can easily be expressed in terms of time and thereby monetary opportunity costs. We find that heirs expect to retire earlier, even when receipts are expected to some degree. Specifically, heirs plan to retire four to five months earlier and thereby accept costs in the form of foregone income and pension entitlements corresponding to 20-30% of the inheritance