Reversing Early Retirement in Germany

Abstract

This article investigates the effects and risks of recent pension reforms in Germany. While German pension policy systematically supported early retirement for many years in order to relieve the regulated labour market in times of economic stagnation, there has been a substantial change of the pension policy paradigm in the more recent past. Latest reforms expect older people to prolong working life. Using data from the German Socio-Economic Panel (GSOEP) and applying micro-level longitudinal research methods, this contribution shows that the recent reversal of early retirement in Germany has been at the price of growing social inequalities in old age.