Demography, Employment and Migration

Demography, Employment & Migration

In a continent beset by ageing populations and a general reluctance to allow more immigration, policymaking must keep a keen eye on the dynamics between population trends, employment patterns, migration flows and the economic consequences and challenges arising from these demographic pressures. This EconPol section examines labor market dynamics, demographic change and its effects, employment trends, job creation, and the impact of technological developments on employment. The various forms of migration are a recurring theme, including international migration, labor migration, internal migration, and refugee movements, and the socio-economic implications for both sending and receiving countries.

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Cover of EconPol Policy Report 31

Is There a Need for Reverse Mortgages in Germany? Empirical Evidence and Policy Implications

Florian Bartsch (Paris School of Economics), Florian Buhlmann (ZEW Mannheim), Karolin Kirschenmann (ZEW Mannheim), Carolin Schmidt (University of Cambridge)

In the face of shifting demographics capital-funded old-age provision is increasingly becoming important in many European countries. Generating sufficient capital for old-age provision, however, poses a challenge to private households. Homeowners can resort to illiquid housing wealth by using home reversion plans or reverse mort-gages. While reverse mortgages are common in the USA and the UK, a German market is quasi non-existent. This Policy Report provides evidence on the demand- and supply-side reasons for the absence of a reverse mortgage market in Germany. It finds that there is potential for the market to grow in the medium term and could benefit cash-poor but house-rich households, hence decreasing old-age poverty. While the analysis focuses on Germany, its implications are equally relevant for other European countries, in particular for those with higher homeownership rates and less generous public pension schemes.

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