Do pension wealth, pension cost and the nature of pension system affect coverage? Evidence from a country where pay-as-you-go and funded systems coexist
AbstractThis paper proposes a nested model, based on an additive random utility model, to analyze whether pension wealth and pension cost affect the probability that a worker affiliates to a pension program, and to observe differentiated effects regarding the nature of the pension system (pay-as-you-go or funded). The analysis focuses on Peru because the peculiar coexistence of a pay-as-you-go and a funded system allows observing first whether a worker is subscribed or not, and then his choice between pay-as-you-go and funded system. The data consists in five cross sections from the ENAHO between 2005 and 2009. Results show that changes on costs have a greater impact over the probability of affiliation than changes on benefits, and that changes affect more when applied to the funded system than when applied to the pay-as-you-go. Variables related with the contracting firm have a large impact. Hence, this paper provides a tool to evaluate measures to solve the coverage problems of pension programs.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 34926.
Date of creation: 21 Nov 2011
Date of revision:
nested model; pension wealth; coverage; pay-as-you-go; funded;
Find related papers by JEL classification:
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
- J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition
This paper has been announced in the following NEP Reports:
- NEP-AGE-2011-12-13 (Economics of Ageing)
- NEP-ALL-2011-12-13 (All new papers)
- NEP-LAB-2011-12-13 (Labour Economics)
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