Giacomo Corneo, Carsten Schröder

Distributional Effects of Subsidizing Retirement Savings Accounts: Evidence from Germany

Section: Articles
FinanzArchiv (FA)

Volume 74 () / Issue 4, pp. 415-445 (31)

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We empirically investigate the distributional consequences of the Riester scheme, the main private pension subsidization program in Germany. We find that 38 % of the aggregate subsidy accrues to the top two deciles of the income distribution, but only 7.3 % to the bottom two. Nonetheless the Riester scheme is almost distributionally neutral in terms of standard inequality measures. Two effects offset each other: a progressive one stemming from the subsidy schedule and a regressive one due to voluntary participation. Participation is associated not only with high income but also with high household wealth.

Giacomo Corneo Geboren 1963; 1992 Promotion in Rom, 1993 in Paris; 1997 Habilitation; Inhaber des Lehrstuhls für Öffentliche Finanzen an der FU Berlin.

Carsten Schröder No current data available.