Die Discussion Papers dienen einer möglichst schnellen Verbreitung von neueren Forschungsarbeiten des ZEW. Die Beiträge liegen in alleiniger Verantwortung der Autoren und stellen nicht notwendigerweise die Meinung des ZEW dar.Discussion Papers are intended to make results of ZEW research promptly available to other economists in order to encourage discussion and suggestions for revisions. The authors are solely responsible for the contents which do not necessarily represent the opinion of the ZEW. Download this and other ZEW Discussion Papers from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp0147.pdf Non-technical SummaryLabor force attachment of males and females developed very differently over the last decades. While participation and employment rates of males declined, the opposite happened for females. Thus, the overall employment gap has decreased considerably. However, this process was not uniform for all skill groups and ages as can be shown in this empirical study. We use data on employment and participation over the period from 1975 to 1995 and disaggregate by skill, age and cohort. This reveals gender specific patterns that give rise to interesting economic interpretations.Employment and participation rates of males have declined over the sample period in all skill groups and in all ages. While the decline is significant at all ages it is impressive at lower and higher ages (25-29 and 55-59). The most pronounced decline can be observed among the low skilled. This drop contrasts to the strong decline in labor supply, measured as the relative size of the group of low skilled. This finding indicates a massive adverse shift in demand for low skilled labor. Among the medium skilled females, employment and participation rose considerably during the 20 years under study. A slight increase can also be found for the low skilled females, which indicates that demand shifts operated more in favor of women. As a consequence, the gender gap in employment has become much narrower, although it still half way from being closed. Still the difference in employment rates of males and females ranges from 5 percentage points (young high skilled) to 30 percentage points (middle aged low skilled). To a substantial degree the narrowing of the gender employment gap is due to a decline in male participation and employment.By modelling age, cohort and time trend effects for each skill/gender group it is shown that the changes in employment and participation can be explained in the following way. First, employment and participation rates have developed similarly. Second, genderspecific employment (and participation) changes can be separated in three separate additive effects: a time trend that affects all ages and cohorts in the same manner; a life-cycle profile that did not change across cohorts; and, a cohort effect that operates as a pure level effect without changing the shape of the life-cycle profiles. The pure time trends are decreasing for males (particularly so for the low skilled) and increasing for females (except ...

Old age social security benefits represent the largest part of the German social budget. In 1993, social security benefits amounted to 10.3 percent of GDP, a share more than two and a half times larger than in the United States. Social security income represents about 80 percent of household income of households headed by a person aged sixty-five and over. The German social security system (the Gesetzliche Rentenversicherung and its equivalents)' is large because it is mandatory for every worker except the self-employed and those with very low incomes. In addition, the German social security system is very generous in two respects. First, the system has a very high replacement rate, generating net retirement incomes that are currently about 72 percent of preretirement net earnings for a worker with a fortyfive-year earnings history and average lifetime This is substantially higher than, for example, the corresponding U.S. net replacement rate of about 53 percent.' Second, the system has very generous early retirement provisions, including easy ways to claim disability benefits, increasing the number of ben

This is the introduction and summary to the ninth phase of an ongoing project on Social Security Programs and Retirement Around the World. This project, which compares the experiences of a dozen developed countries, was launched in the mid 1990s, following decades of decline in the labor force participation rate of older men. The first several phases of the project document that social security program provisions can create powerful incentives for retirement that are strongly correlated with the labor force behavior of older workers. Subsequent phases of the project have explored how disability program provisions affect retirement, whether there is a link between older employment and youth unemployment, and whether older individuals are healthy enough to work longer. In the two decades since the project began, the dramatic decline in men's labor force participation has been replaced by sharply rising participation rates. Older women's participation has increased dramatically as well. In our last study, we investigated some potential causes of rising participation, include changes in health and education. As we noted then, countries have undertaken numerous reforms of their social security programs, disability programs, and other public benefit programs available to older workers over the same period during which participation has increased. In this ninth phase of the project, we explore how the financial incentive to work at older ages has evolved from 1980 to the present. We highlight the important role of reforms in these changing incentives and examine how changing incentives may have affected retirement behavior.

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See Fitti and Kovar (1987). The response rate to the SOA was 96.7%.