Preferences of the elderly towards intergenerational transfers - Stumbling block for future social policy reforms in Germany?

Harald Wilkoszewski, Max Planck Institute for Demographic Research

Population aging is increasingly putting pressure on Western welfare systems: budget constraints and rising numbers of old age beneficiaries tighten allocation problems between generations in these countries. In Germany this situation has been particularly predominant over the past ten years, as population aging is accelerating due to enduring very low fertility. Furthermore, the national budget has had to face immense deficits due to high unemployment. As a result, the German political discussion has focused on reductions of public transfers for the elderly and an increase of transfers for the younger generation. However, the implementation of such reforms might not be feasible in the future as the number of elderly people will grow, potentially resulting in more political power. In this paper we identify the room for future social policy reforms by analysing the elderly's preferences towards public intergenerational transfers using data from the new 2003 Population Policy Acceptance Survey.