Lecture 5 Flashcards

1
Q

long-term downwards trend in fertility

A

Babyboom von 1955-65
Pillenknick ab 1974
conservation level bei 2,1 => every parent generation has to replace itself
Total fertillity rate: 1,5-1,6
Japan/ Südkorea: 1,1
erkennbar zudem: women in politics => hiugher fertility

DDR: women rel. early 1st child sonst hätte man nichts bekommen; nach Wiedervereinigung dann erstmal “Pause”

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2
Q

What are the main effects on population?

A

Fertillity
Mortality
Migration

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3
Q

What is the old age dependency ratio?

A

=Verhältnis der Anzahl von personen, die nicht im Erwerbstätigen Alter sind zu Anzahl der Erwerbstätigenalter

The total dependency ratio:
It represents the ratio of persons of retirement age AND children (e.g., 65 years and older and 20 years and younger) to 100 persons of working age (e.g., from 20 to under 65 years).
Nicht arbietsfähiges ater/arbeitsfähiges alter

The old-age dependency ratio:
It represents the ratio of persons of retirement age (e.g., 65 years and older) to 100 persons of working age (e.g., from 20 to under 65 years).
65 oder älter/ erwerbsfähiges alter

The child dependency ratio:
It represents the ratio of persons of children (e.g., 20 years and younger) to 100 persons of working age (e.g., from 20 to under 65 years)
14 oder jünger/ erwerbsfähiges Alter

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4
Q

Demography as major challenge

A

von Pyramide zu Baum
potential workforce von 62% zu 2060 56%

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5
Q

Demography as major challenge

A

von Pyramide zu Baum
potential workforce von 62% zu 2060 56%

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6
Q

What was Bismarck´s retirement plan?

A

1889: Invalidity and Old-Age Insurance Act (1st one ww)
basis for german statutory pension insurance for all workers over the age of 16; up tzo 2k marks

jedoch hauptsächlich nur bei work disability, da die wenigstens so alt wurden, dass sie eine Rente bekamen
pension ü70 und such nur wenn 30 jahre lang eingezahlt wurde

pension: halb von employers and employees gezahlt worden

Pay-as-you-go/ Umlagefinanzierung: eingezahlte verträge werden unmittelbar zu Finanzierung der Leistungsberechtigten herangezogen, also and iese wieder ausbezahlt
=> ob die einzahlenden die benefits in gleicher höhe bekommen, ist nicht secured

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7
Q

How is Pay as you go working?

A

economically speaking it is a mistake, politically totally understandable
1962: 1 pensioner (recipient) to 6 workers (contributor) (working and in a pension plan)
2019: 1 pensioner to 2,1 workers (working and in a pension plan)

jedoch nicht so, dass jeder 50€ in Rentenversicherung einzahlt (wäre nur noch 105 anstatt 300) sondern increased contributions by 20% => 126€

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8
Q

What is economics´ labelling problem?

A

leute sehen, dass rentensystem in trouble geraten kann

zudem: public deficit is not reflecting what is going on

wenn man einfach dif. wording nutzt, you can label the same economic policy in completely different reports of statistics:
zb wenn mann 100 leuten 10k leiht, wird es nicht als expense angesehen
in realität ist aber staat im Minus=> future/ hidden debt => nimmt staat auseinander

in current statistics, generational problem not involved => in future: reflection of fertility decisions of the past
Solving: GENERAL ACCOUNTING

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9
Q

What is the intertemporal budget constraint?

A

Formel nicht lernen, nur verstehen ca.
gen. accounting: simulating all deficits of the future and trying to aggregate them and make them visible
DEBTbase year= debt has to be paid by living/future gen.; if not paid= hidden debt is created that we are pushing towards the future; intertemp. public liabilities

money our parents paid for our grandparents
they also want money back later => we already have a large debt for 2030/35
we will receive less money later and have to make sure that our parents receive enough money

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10
Q

Age-specific Contributions and Benefits of Public Pension/Health Insurance

A

Beiträge= Abgaben vom Behalt
the higher the wage=> the higher the contribution
PUBLIC PENSION
beginnen ca. mit 18, peak von 30-55, dann sinked bis 67

sozialleistungen: beginnend mit 40/45, starke steigung ab 60 bis 65, dann weiter steigung aber nicht mehr exponentiell

PUBLIC HEALTH
Beiträge: ab ca 18, peak von 30-55, dann sinked bis 67, dann bei konstantem level
net receivers: als baby viel, dann ab 2-20 stable und wenig, dann leichte Steigerung bis 45, dann starke steigung bis 89 dann konstantes Level

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11
Q

How is long term care being financed?

A

net contributions from 20-67
abgaben ab 75 exponentiell steigend
seit reform: mehr einzahlung aber auch mehr auszahlung

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12
Q

Germany´s generational contract

A

kinder und rentner werden von middle age people finanziert

implicit debt: alles durch das heutige Steuer- und Abgabenniveau nicht gedeckte Leistungsversprechen (für die Zukunft)
damit wir alles auf einmal abzahlen könnten, müssten wir die steuern +17,4% steigern oder -14% Staatsausgaben

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13
Q

What wopuld happen if nothing happens?
(MIGRATE;))

A

hoher Druck auf uns
we would need higher wager to be able to stem the higher wage taxes (that are necessary for financing health and pension system)

da nicht nur social insurance system quite generous sondern auch noch demographic change (less fertility, baby boomers getting old, higher life expectancy) => PRESSURE
pay-as-you-go prinzig: is demotivational, da man letztendlich eh weniger bekommen wird als was man einzahlt (da man mehr renter zahlen muss)

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14
Q

SOLUTION: WE HAVE TO WORK LONGER

A

bis 70
auch nicht unfair, da höhere life expectancy

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15
Q

Warum private KV?

A

sytsem excludes ppl=> private KV => own mandatory pension systerm
=> why not include=> heavily educated= higher life expectancy => more medical treatment

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16
Q

Who is allocatinf force to counteract overconsumtion?

A

Stuck in the middle
highly regulated system but with market elements => no one really takes care

17
Q

What are possible reform options?

A

Market-orientated reforms
* Government-secured basic health care basket
* Additional private insurance packages (dental care, etc.)
* Deductibles
* Competition among providers (mehr Krankenkassen)

Government-orientated reforms
* Bringing private insured under the roof of the public system
* Regulation of new drug and treatments
* Price fixing
* More tax money

18
Q

Long Term Care- even more special

A

even higher pressure than in any other system

Determinants of long-term care expenditure:
demographic drivers:
share of old age dependants (life expectancy, health care expenditure)
other dependants

non-geographic drivers:
income
informal care supply
weak productivity

Baumol´s cost disease:
service industries: only small productivity gains => even if wage increases, no productivity gains
other industry: productivity gains exist

89/90% of care givers are women
Problem: immer mehr unstable relationships+ women more qualified and more working
DAHER: shift from family care to professional care which is twice as expensive