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Structural Pension Reform: The Chilean Experience

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  • Mehdi Ben Braham

Abstract

Chile was the first country to introduce structural pension reform based upon a funded pillar. Implemented in 1981, Chilean pension reform inspired many other Latin American countries. During the nineties, an important literature analysed the positive and negative aspects of pension funds in Chile. This paper is organised as follows: the first section analyzes the macroeconomic implications of the pension fund introduction. I then present the Chilean pension system and its performances with respect to significant indicators in order to see whether Chile achieved the macroeconomic objectives of the reform. In the third section, I analyze the potential risks and difficulties of pension fund introduction, classifying them through their endogenous or exogenous character.

Suggested Citation

  • Mehdi Ben Braham, 2007. "Structural Pension Reform: The Chilean Experience," NFI Working Papers 2007-WP-20, Indiana State University, Scott College of Business, Networks Financial Institute.
    • Handle: RePEc:nfi:nfiwps:2007-wp-20
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    File URL: http://www.indstate.edu/business/sites/business.indstate.edu/files/Docs/2007-WP-20_Ben_Braham.pdf
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    References listed on IDEAS

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    1. Alberto Arenas de Mesa & David Bravo & Jere R. Behrman & Olivia S. Mitchell & Petra E. Todd, 2006. "The Chilean Pension Reform Turns 25: Lessons From the Social Protection Survey," NBER Working Papers 12401, National Bureau of Economic Research, Inc.
    2. Eduardo Walker & Fernando Lefort, 2002. "Pension Reform And Capital Markets: Are There Any (Hard) Links?," Abante, Escuela de Administracion. Pontificia Universidad Católica de Chile., vol. 5(2), pages 77-149.
    3. Barr, Nicholas, 2002. "Reforming pensions: myths, truths, and policy choices," LSE Research Online Documents on Economics 286, London School of Economics and Political Science, LSE Library.
    4. Lopez Murphy, Pablo & Musalem, Alberto R., 2004. "Pension funds and national saving," Policy Research Working Paper Series 3410, The World Bank.
    5. Walker, Eduardo*Lefort, Fernando, 2002. "Pension reform and capital markets : are there any (hard) links?," Policy Research Working Paper Series 24082, The World Bank.
    6. Catalan, Mario & Impavido, Gregorio & Musalem, Alberto R., 2000. "Contractual savings or stock market development - Which leads?," Policy Research Working Paper Series 2421, The World Bank.
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    Cited by:

    1. Petr Brabec & Karina Kubelková, 2015. "Penzijní reforma v Chile: aktuální vývoj plně fondového DC systému a analýza dopadů [Chilean Pension System: Current Development of Fully Funded DC System and Its Impacts]," Politická ekonomie, Prague University of Economics and Business, vol. 2015(4), pages 517-533.

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    More about this item

    Keywords

    Financial markets and macroeconomy; pension funds; Social Security; Chile;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • 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

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