IDEAS home Printed from https://ideas.repec.org/a/taf/intecj/v19y2005i2p305-319.html
   My bibliography  Save this article

Pension reforms and employment

Author

Listed:
  • Alejandra Cox Edwards

Abstract

The Chilean social security reform became effective in November 1980, replacing a traditional pay-as-you-go system with a unified system based on a minimum required contribution towards an individual account. The reform lowered the combined contribution rates towards old age and disability pension and tightened the link between contributions and benefits increasing individuals' valuation of contributions. This paper offers estimates of 'money's worth' ratios for 'typical contributors' before and after reform, indicating that the post-reform money's worth of each peso of contribution increased substantially for all groups, and particularly for women. Using aggregate data on employment and output from 1960 to 2002, estimates imply that a 10% reduction in the payroll tax led to a 2% increase in employment, and to a 0.7 point expansion in labour force participation.

Suggested Citation

  • Alejandra Cox Edwards, 2005. "Pension reforms and employment," International Economic Journal, Taylor & Francis Journals, vol. 19(2), pages 305-319.
    • Handle: RePEc:taf:intecj:v:19:y:2005:i:2:p:305-319
    DOI: 10.1080/10168730500080600
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/10168730500080600
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/10168730500080600?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Barrientos, Armando, 1998. "Pension reform, personal pensions and gender differences in pension coverage," World Development, Elsevier, vol. 26(1), pages 125-137, January.
    2. Edwards, Sebastian & Edwards, Alejandra Cox, 2002. "Social Security Privatization and Labor Markets: The Case of Chile," Economic Development and Cultural Change, University of Chicago Press, vol. 50(3), pages 465-489, April.
    3. James, Estelle & Edwards, Alejandra Cox & Wong, Rebecca, 2003. "The gender impact of pension reform : a cross-country analysis," Policy Research Working Paper Series 3074, The World Bank.
    4. James, Estelle & Edwards, Alejandra Cox & Wong, Rebeca, 2003. "The gender impact of pension reform," Journal of Pension Economics and Finance, Cambridge University Press, vol. 2(2), pages 181-219, July.
    5. Sebastian Edwards & Alejandra Cox Edwards, 2002. "Social Security Privatization Reform and Labor Markets: The Case of Chile," NBER Working Papers 8924, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Estelle James & Alejandra Cox Edwards, 2005. "Do Individual Accounts Postpone Retirement: Evidence from Chile," Working Papers wp098, University of Michigan, Michigan Retirement Research Center.
    2. Marcela PARADA‐CONTZEN, 2023. "Gender, family status and health characteristics: Understanding retirement inequalities in the Chilean pension model," International Labour Review, International Labour Organization, vol. 162(2), pages 271-303, June.
    3. Robert Holzmann & Richard Hinz, 2005. "Old Age Income Support in the 21st century: An International Perspective on Pension Systems and Reform," World Bank Publications - Books, The World Bank Group, number 7336, December.
    4. David Robalino, 2005. "Pensions in the Middle East and North Africa: Time for Change," World Bank Publications - Books, The World Bank Group, number 7427, December.
    5. Tirachini, Alejandro & Proost, Stef, 2021. "Transport taxes and subsidies in developing countries: The effect of income inequality aversion," Economics of Transportation, Elsevier, vol. 25(C).
    6. MOUNA BEN OTHMAN & Mohamed Ali MAROUANI, 2016. "Labor Market Effects of Pension Reform :an overlapping genenrations general equilibrium model applied to Tunisia," EcoMod2016 9294, EcoMod.
    7. Auerbach, Paula & Genoni, María Eugenia & Pagés, Carmen, 2005. "Social Security Coverage and the Labor Market in Developing Countries," IDB Publications (Working Papers) 1111, Inter-American Development Bank.
    8. Paula Auerbach & María Eugenia Genoni & Carmen Pagés-Serra, 2005. "Cobertura del sistema de seguridad social y el mercado laboral en países en desarrollo," Research Department Publications 4422, Inter-American Development Bank, Research Department.
    9. Javier Pla-Porcel & Manuel Ventura-Marco & Carlos Vidal-Meliá, 2017. "How do unisex life care annuities embedded in a pay-as-you-go retirement system affect gender redistribution?," Documentos de Trabajo del ICAE 2017-11, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.
    10. Dayoub, Mariam & Lasagabaster, Esperanza, 2008. "General trends in competition policy and investment regulation in mandatory defined contribution markets in Latin America," Policy Research Working Paper Series 4720, The World Bank.
    11. Lemos, Sara, 2004. "The Effects of the Minimum Wage in the Formal and Informal Sectors in Brazil," IZA Discussion Papers 1089, Institute of Labor Economics (IZA).
    12. Estelle James & Guillermo Martinez & Augusto Iglesias, 2004. "Payout Choices by Retirees in Chile: What Are They and Why?," Working Papers wp068, University of Michigan, Michigan Retirement Research Center.
    13. Cerda, Rodrigo A., 2008. "The Chilean pension reform: A model to follow?," Journal of Policy Modeling, Elsevier, vol. 30(3), pages 541-558.
    14. Miroslav Verbič & Rok Spruk, 2019. "Political economy of pension reforms: an empirical investigation," European Journal of Law and Economics, Springer, vol. 47(2), pages 171-232, April.
    15. Adriana Kugler, 2011. "Is there an Anti-labor Bias of Taxes? A Survey of the Evidence from Latin America and Around the World," Research Department Publications 4746, Inter-American Development Bank, Research Department.
    16. Andrea Repetto & Alejandro Micco, 2012. "Productivity, Misallocation and the Labor Market," Working Papers wp_020, Adolfo Ibáñez University, School of Government.
    17. Andres J. Vargas, 2011. "The Effect of Social Security Contributions on Coverage and Wages: A Gender Perspective Using a Natural Experiment from Colombia," Southern Economic Journal, John Wiley & Sons, vol. 78(2), pages 476-501, October.
    18. Xufei Zhang & Hongsheng Fang & Lin Guo, 2023. "Corporate Endowment Insurance Fee Reduction and Employee Wages: Evidence from China," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(2), pages 192-222, March.
    19. Carmen Li & Javier Olivera, 2009. "Cobertura y afiliación al sistema privado de pensiones del Perú," Capítulos de Libros PUCP / Chapters of PUCP books, in: Efraín Gonzales de Olarte & Javier M. Iguiñiz Echeverría (ed.), Desarrollo económico y bienestar. Homenaje a Máximo Vega-Centeno, edition 1, chapter 8, pages 221-239, Fondo Editorial - Pontificia Universidad Católica del Perú.
    20. David Coble & Sebastián Faúndez, 2016. "The labor wedge and business cycles in Chile," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 19(1), pages 38-56, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:intecj:v:19:y:2005:i:2:p:305-319. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RIEJ20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.