In Germany, birth and immigration rates have increased above their long-term averages in recent years and are now higher than many previous population projections have assumed for the future. Has this changed the perspective that Germany is on the verge of a phase of severe population aging? Will this at least mitigate the challenges posed by population aging to financing social security systems?
Carrying out numerous long-term simulations, financial economists Martin Werding and Benjamin Läpple from the Ruhr University Bochum test in this study how variable population aging and its consequences for social security systems still are. They show that even less realistic increases in birth and immigration rates are not enough to stop population aging or even to mitigate it noticeably until 2035. The same applies to the rapidly growing strain on social service finances and its consequences for members of different generations. So, are the consequences of population aging unavoidable?
Not necessarily. The various scenarios show: A bundle of measures with different timing effects - including among others a moderate increase in birth and immigration rates, a higher employment rate for women and immigrants and a dynamic age limit - can significantly reduce the burden on social service systems.