Moving from Pay as You Go to Privately Managed Individual Pension Accounts. What have we learned after 25 years of the Chilean Pension Reform?
AbstractThis paper presents a brief history of pension reform in Chile, and the reasons behind the introduction of individual privately-managed accounts in 1981, as well as the adjustments to the system introduced in 2006-07. The main conclusions are that the system is sound, but the reinforcement of the social protection to low income-low contribution workers was a necessary step, given the problems of the formal labour market. This adjustment is also feasible since the budgetary expenses linked to the transition of the 1981 reform are entering the decreasing phase, opening room for these adjustments. We emphasize the importance of economic growth for the good performance of the pension system, reversing one of the traditional arguments for pension reform. Finally we explore elements that must be taken into account when designing this type of pension reform.
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Bibliographic InfoPaper provided by BBVA Bank, Economic Research Department in its series Working Papers with number 0805.
Length: 17 pages
Date of creation: Jun 2008
Date of revision:
pension reform; Chile; economic growth; fiscal policy; labour market; market reforms;
Find related papers by JEL classification:
- G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
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- Bertranou, Fabio & Calvo, Esteban & Bertranou, Evelina, 2009.
"Is Latin America retreating from individual retirement accounts?,"
17422, University Library of Munich, Germany.
- Fabio Bertranou & Esteban Calvo & Evelina Bertranou, 2009. "Is Latin America Retreating From Individual Retirement Accounts?," Issues in Brief ib2009-9-14, Center for Retirement Research, revised Jul 2009.
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