Evolution in the structure of employment and unemployment and its consequences for general pensions schemes1

The statutory pension insurance scheme in the Federal Republic of Germany has been financed by the allocation procedure de jure for some time now and de facto for a considerable period. Consequently, the annual expenditures have to be covered by revenues in a given year. As a result, the allocation procedure implies a contract between generations. In 1987, the main sources of revenue were: 83.2 per cent revenue from contributions and 15 per cent from the Federal subsidy.