The impact of social embedment on the possibility to make ends meet for older people in Germany

Robert Naderi, Federal Institute for Population Research, Germany
Frank Micheel, Federal Institute for Population Research, Germany

The ageing process is due to low fertility and rising life expectancy one of the major future demographic trends that the most developed countries have in common. Germany is no exception. According to an expected increasing number of retirees in the forthcoming decades and recent reforms of the public pension system (lowering the replacement rate, or increasing the statutory retirement age by two years) the fear is under discussion whether it will become increasingly difficult for older people to deal with their economic situation. Possible future poverty among older people is a rising concern. This paper aims to analyse the relationship between the subjectively evaluated income situation and the social embedment of older people in Germany (55 years and older). We observed a significant discrepancy between the expression that a household make ends meet and the household income. Our question is why a remarkable share of older respondents with low income evaluates their economic situation better as expected. Based on the theoretical background of social capital we suggest that this is related to embedment into family networks, the absence of self reported loneliness and a general trust in other people. By using the first wave of the German Generations and Gender Survey (GGS) three hypotheses are put to test: The subjective positive evaluation of the income situation is positively affected by 1) the embedment into family networks, 2) the emotional expression of social embedment and 3) by a general trust in other people.