Active Pension: €2.8 billion in lost tax revenue

Windfall effects amounting to €2.8 billion annually—that’s the estimate from the Cologne Institute for Economic Research (IW Köln) on the Active Pension, one of the Union’s central pension policy proposals during the federal election campaign. However, during the campaign, it was always argued that the Active Pension would motivate people to work more. But is that really realistic? The available data suggest that work motives are primarily not financial in nature. The Active Pension is part of the current pension package. Its implementation is essentially a done deal. I’m curious to see whether the debate will gain momentum again. The analysis was written for IW Köln by Martin Beznoska, Ruth Schüler, and Stefanie Seele. You can read it on the institute’s website.