The Structural Pension Reform in Chile: Effects, Comparisons with Other Latin American Reforms, and Lessons
AbstractChile pioneered a structural reform in Latin America that privatized its public pension system and influenced similar reforms in another nine countries. Twenty-five years later, this article evaluates the macroeconomic, microeconomic, and social effects of this reform in Chile and the other countries in the region, and extracts lessons from those experiences. Fiscal costs of the reform have been high and prolonged, exceeded capital accumulation, and had a negative impact on national savings, but Chile's reform has contributed to the development of capital markets; employer's contributions were eliminated or reduced in half of the countries and the worker's share in the total contribution averages 65 per cent; competition is afflicted by a small number of administrators and a high level of concentration; administrative costs are high and stagnant; capital returns are fair but declining; portfolio diversification has been achieved only in Chile and Peru; labour-force coverage has declined in all ten countries, and gender and income inequalities have expanded. Copyright 2006, Oxford University Press.
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Bibliographic InfoArticle provided by Oxford University Press in its journal Oxford Review of Economic Policy.
Volume (Year): 22 (2006)
Issue (Month): 1 (Spring)
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- Javier Olivera & Blanca Zuluaga, 2013.
"The ex-ante effects of non-contributory pensions in Colombia and Peru,"
201314, Geary Institute, University College Dublin.
- Javier Olivera & Blanca Zuluaga, 2013. "The ex-ante effects of non-contributory pensions in Colombia and Peru," Working Papers 299, ECINEQ, Society for the Study of Economic Inequality.
- Emma Aguila & Michael D. Hurd & Susann Rohwedder, 2008. "Pension Reform in Mexico: The Evolution of Pension Fund Management Fees and their Effect on Pension Balances," Working Papers wp196, University of Michigan, Michigan Retirement Research Center.
- Park, Donghyun & Estrada, Gemma, 2012. "Developing Asia’s Pension Systems and Old-Age Income Support," ADBI Working Papers 358, Asian Development Bank Institute.
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