Personal Retirement Accounts and Saving
AbstractMany countries are including personal retirement accounts (PRAs) as part of their social security systems. PRA systems boost private savings at the macro level by converting a government financial liability into private wealth. At the micro level, however, crowing-out effects on household savings could be offsetting some of this increase in private savings and may lead to inadequate preparedness for retirement. The author tests this hypothesis by using the Mexican social security reform of 1997 as a natural experiment, because only part of that system was changed from pay-as-you-go to PRAs. She finds that social security reform with PRAs does indeed crowd out household savings and recommends strengthening voluntary savings for retirement along with social security reform.
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Bibliographic InfoPaper provided by RAND Corporation Publications Department in its series Working Papers with number 600.
Length: 39 pages
Date of creation: Jul 2008
Date of revision:
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Social security reform; household saving; public policy evaluation;
Other versions of this item:
- D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving
- 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
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- Emma Aguila & Julie Zissimopoulos, 2009.
"Labor Market and Immigration Behavior of Middle-Aged and Elderly Mexicans,"
726, RAND Corporation Publications Department.
- Emma Aguila & Julie Zissimopoulos, 2008. "Labor Market and Immigration Behavior of Middle-Aged and Elderly Mexicans," Working Papers wp192, University of Michigan, Michigan Retirement Research Center.
- Adeline Delavande & Susann Rohwedder, 2008. "Individuals’ Responses to Social Security Reform," Working Papers wp182, University of Michigan, Michigan Retirement Research Center.
- Edwin van Gameren, 2010. "Labor force participation by the elderly in Mexico," Serie documentos de trabajo del Centro de Estudios EconÃ³micos 2010-06, El Colegio de México, Centro de Estudios Económicos.
- Emma Aguila & Michael D. Hurd & Susann Rohwedder, 2008. "Pension Reform in Mexico: The Evolution of Pension Fund Management Fees and their Effect on Pension Balances," Working Papers wp196, University of Michigan, Michigan Retirement Research Center.
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