Due to the accelerating demographic change of the population the reform of the existing pension systems constitutes one of the greatest political challenges in most European countries. A theoretical discussion of different pension reforms must incorporate not only the demographic aspect but also...

The aim of this paper is to quantify the welfare effects of some currently discussed pension reform proposals in Germany. The analysis is based on an extended overlapping-generations model which accounts for intra-generational heterogeneity, rising life expectancy and declining fertility. Given...