By Ingrid Hamm, Helmut Seitz, Martin Werding
This e-book presents an updated precis of the results of demographic getting older for hard work markets, monetary markets, monetary development, social protection schemes and public funds in Germany, basically reflecting the current country of information in any of those components. All contributions are written through best specialists of their fields and are in response to effects that emerge on the leading edge of present examine.
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Extra info for Demographic Change in Germany: The Economic and Fiscal Consequences
As the level of education tends to be higher for younger than for older age groups, the average level of skills of the labor force tends to increase with aging as more of the older cohorts go into retirement. This would boost labor productivity. However, the share of older workers in the workforce increases with aging and if productivity declines at older age this would lower average productivity of the workforce. Thus, much depends on the productivity profile of workers over their lifetime. An optimistic view is that productivity of an average worker increases until it reaches a peak during the forties and remains constant thereafter while a pessimistic view assumes that it falls moderately or – more pessimistic – falls sharply after this peak; in the latter case aggregate productivity growth could fall significantly with aging.
Are these options realistic? Birg et al. 1. Their results show that it would take many years to compensate the fertility drop between 1965 and 1975. The absence of potential mothers and fathers determines the decline of the population for the following decades. Under these conditions a population that is stable in size and composition is possible not before the second half of the 21st century. The results of the 11th co-ordinated population prospects of the Federal Statistical Office support these findings.
Above all, ageselectivity plays an important role for the regional development. The main trends of German large-distance internal migration during the last decades were the following. • Western Germany: since the 1960s, there has been a demographic relocation towards the South, out-migration in this direction being even larger from the Northern than from the mid-Western states; between the 1960s and 1990s, there was also some out-migration from the Northern towards the Western states; before and after, there were reverse flows.