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Profitability of pension contributions – evidence from real-life employment biographies.
- Source :
- Journal of Pension Economics & Finance; Jul2012, Vol. 11 Issue 3, p311-336, 26p
- Publication Year :
- 2012
-
Abstract
- Micro-econometric intra-cohort profitability analyses of pay-as-you-go (PAYG) pension contributions are rare. We use representative employment histories of German PAYG pension insurants retiring in year 2005 to examine the determinants of the profitability of contributions using nominal internal rates of return (IRR) as measure. When future nominal pension entitlements are frozen at today's level, average IRR is about three percent. It increases in beneficiaries' remaining life expectancies at retirement and in the length of non-contribution periods resulting, for example, from child care. Interestingly, IRR is decreasing in insurants' earnings capacity, indicating that the system entails an intra-cohort progressive element. [ABSTRACT FROM PUBLISHER]
- Subjects :
- PENSIONS
EMPLOYMENT
PROFITABILITY
RETIREMENT
INTERNAL rate of return
WAGES
Subjects
Details
- Language :
- English
- ISSN :
- 14747472
- Volume :
- 11
- Issue :
- 3
- Database :
- Complementary Index
- Journal :
- Journal of Pension Economics & Finance
- Publication Type :
- Academic Journal
- Accession number :
- 77739449
- Full Text :
- https://doi.org/10.1017/S147474721100031X