Conventional pension systems suffer from a design defect which makes them financially unsustainable, and a source of inefficiency for the economy as a whole. The paper outlines a second-best policy which includes a public pension system made up of two parallel schemes, a Bismarckian one allowing...

The upcoming demographic crisis in Germany demands fundamentalreforms of the pension system. In a democracy, reforms are, however, onlyfeasible when they are supported by the majority of the electorate. Todetermine whether the majority is in favor of reforms of the pension system,we calculate...

Public pay-as-you-go pensions still form the dominant pillar of old-age provision in Germany. This is in marked contrast to the situation in Anglo-Saxon countries. It has advantages if labour markets are strong, e.g., following a quick recovery from the Great Recession. It has disadvantages, as...