Transfers, consumption and income over the lifecycle in Germany

Abstract

This paper seeks to quantify all public and private interage monetary flows in Germany applying the National Transfer Account method. Germany's lifecycle deficit is shaped by long periods spent in education, early retirement, and low labor force participation rates among the older work force, resulting in a rather short surplus period. Germany is a picture book welfare state, over the last century the government took over more and more functions the family would once have absorbed. During the long dependent periods of childhood and old age, the main expenditures-including education for younger people and pensions and health care for older people-are publicly financed. Private consumption is low for these items. In contrast to public in-kind transfers, public cash transfers are highly skewed to the elderly. Special emphasis will be placed on differences in East/West lifecycle deficit patterns.