Public Finance

The backbone of society & the economy

Public finance is the backbone of government activity. It is known to the public in the form of taxes, social security contributions and fees.

In Germany, the Federal Government, the “Länder”, local authorities and social security funds use public funding to finance their activities, for example, schools, hospitals and roads. The public (digital) infrastructure is a central basis for business activities and sustainable growth. Through income redistribution, the government supports social cohesion and confidence in the social market economy.

Future challenges for the public sector

The public sector is facing a variety of challenges. An aging population increases expenditure on pensions, health and long-term care. Climate change and digitization require investments in new technology and education. For the transition into a digital, green economy, the tax and transfer system must be reformed, for instance to cushion social costs.

This gives rise to several questions that must be answered on a profound basis and with foresight:

  • Who profits from carbon taxes?
  • What are the consequences of demographic change for intergenerational justice?
  • How is the national debt developing in Germany and internationally?
  • What effects will increasing social security contributions have on employment?
  • How can local authorities prepare their budgets for the challenges of the future?

Public finance: A selection of our services

Model-based analyses

With our models, we analyze the distributional effects of tax reforms, put numbers on investment needs and quantify long-term effects on public finance.

Public finance

We examine the capacity and need for reform of public finance.

Assessment of redistribution effects

We determine the redistribution effects of the tax and transfer systems.

Public investment

We assess the financing of public investments against the backdrop of the megatrends demography, climate change and digitization.

Strategic fiscal consolidation

We advise local players on how to achieve sustainable strategic consolidation of their budgets.

Our work on this topic

Take a look at our latest projects and activities.

No generational conflict: Young and old are primarily looking for security.

| Project

Study compares “boomers” and Generation Z: high need for security for young and old alike.

Green finance's contribution to achieving climate neutrality in Germany

| Project

What is the public share of climate protection investment? An investigation for the KfW.

Green Finance's contribution on the way to climate neutrality

| Project

On the way to climate neutrality, green finance gains importance. For the first time, the total climate protection investments required to achieve the climate targets in Germany have been quantified by Prognos.

Economic development in Germany and Bavaria until 2040

| Project

Bavaria and Germany can make up for the GDP slump caused by Corona by 2022. Prognos prepared a forecast on economic dynamics until 2040 for the vbw.

Das Bildungsgrundeinkommen – ein Instrument der Weiterbildungsfinanzierung

| Project

Das Zentrum Liberale Moderne macht einen Vorschlag, die Weiterbildungsfinanzierung auf neue Grundlagen zu stellen. Prognos hat die Kosten des neuen Instrumentes in einer Studie abgeschätzt.

Germany Report 2025|2035|2045

| Project

Germany will become more global, more digital, greener and older in the next 30 years. This is shown by Prognos Deutschland Report from 2018/2019.

Pension Perspectives 2040

| Project

How high the pensions will be for a typical employee depends, among other things, on the occupation and the place of residence. This is the result of recent research by Prognos for GDV.

Do you have questions?

Your contact at Prognos

Dr Stefan Moog

Senior Expert

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About us

Prognos – Providing Orientation.

Prognos is one of the oldest economic research centres in Europe. Founded at the University of Basel, Prognos experts have been conducting research for a wide range of clients from the public and private sectors since 1959 – politically independent, scientifically sound.

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