The Impact of the COVID-19 Pandemic on the German Pension System

Abstract

The COVID-19 pandemic was declared over in April 2023. Like the financial crisis of 2008, the pandemic outbreak had an exogenous shock effect on Germany's micro- and macroeconomic environment. This mainly affected the labor market, and after that, the Bundesregierung took measures to stabilize the labor market to prevent a dramatic increase in unemployment. The German pension system is a pay-as-you-go system that is financed on a long-term basis by demographic and economic developments. Based on these factors, projections on the effects of the COVID-19 pandemic on statutory pension insurance in Germany were already made in 2020. This paper compares the forecasts from 2020 with the actual development, combined with whether German pension insurance can be assessed as sustainable after the pandemic.