A review of the pension systems in Latin America
AbstractLatin America is one of the pioneers in introducing individual capitalization schemes as part of their compulsory component of their pension systems. Thirty years have passed since Chile took the !irst step. Now what reforms have been achieved today? What challenges lie ahead? This paper reviews the motivations of the reforms and their progress, using the experience of Colombia, Chile, Mexico and Peru. The main results are presented in terms of coverage, replacement rates, and !iscal sustainability, with projections to 2050. The results show that while the reforms of both the public and private pension systems have been key to providing !iscal sustainability and have strengthened retirement savings for groups with greater permanence in the labour market, there are still many pending challenges in order to address the signi!icant percentage of people who are self-employed, within the informal sector or frequently unemployed. In that sense, for each of the countries studied, recommendations have been explored that could help reduce the level of vulnerability at the retirement stage, incentivize savings, focus resources on the truly poor, and maintain !iscal balance.
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Bibliographic InfoPaper provided by BBVA Bank, Economic Research Department in its series Working Papers with number 1115.
Length: 27 pages
Date of creation: Apr 2011
Date of revision:
Latin America; pensions; retirement;
Find related papers by JEL classification:
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
This paper has been announced in the following NEP Reports:
- NEP-AGE-2011-05-14 (Economics of Ageing)
- NEP-ALL-2011-05-14 (All new papers)
- NEP-LAB-2011-05-14 (Labour Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Edward R. Whitehouse, 2009. "Pensions, Purchasing-Power Risk, Inflation and Indexation," OECD Social, Employment and Migration Working Papers 77, OECD Publishing.
- Luis J. Carranza & Angel Melguizo & David Tuesta, 2012. "Matching Contributions for Pensions in Colombia, Mexico, and Peru: Experiences and Prospects," Working Papers, BBVA Bank, Economic Research Department 1232, BBVA Bank, Economic Research Department.
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