Regional impact of German statutory pension insurance

The regional impact of old age pension systems has received little attention. For example, the German statutory pension insurance ("gesetzliche Rentenversicherung", GRV) was hitherto to the greatest extent discussed in the context with the situation in West and East Germany. However, the benefits of old age pension systems can have economic effects on the regional level. The article focuses on those aspects of the GRV: the economic relevance on the regional level is discussed, the quantitative importance is shown, and against this background some consequences of the reduction of the benefit level are problematized. The descriptive analysis illustrates the economic relevance of benefits of the GRV for regions in Germany. It contributes to regional purchasing power with manifold direct and indirect effects, which are different according to the regional characteristics. It is evident that the economy of regions with a low gross domestic product (GDP) to a great extent depends on the benefits of the GRV. The benefits are also relevant for the financial situation of the communities because they are preventing the occurrence of social problems or reducing their effects. The reduction of the level of the benefits implies income losses for private households, which affects communities to a different extent. Overall, the benefits of the GRV are of high relevance for the adaptation or the increase of the differences of the regional living conditions, e. g., between agglomeration and rural regions.