Pension design with a large informal labor market: evidence from Chile
AbstractPension design in developing countries must take into account that both contributory and non-contributory pension schemes can affect incentives to work informally, with important fiscal consequences. The extent of this problem depends on the nature of the informal labor market: residual or competitive? Linked administrative and self-reported data from Chile on employment histories, earnings and savings are used to estimate a dynamic behavioral model in which a couple faces a labor market composed of a covered sector, that is subject to mandatory pension contributions, and an uncovered sector of self-employed and informal jobs. The estimated model is used to determine the extent of labor market segmentation, and whether mandatory pension contributions and minimum pension benefits could reduce the pension system's coverage rate and crowd out private savings. Then, an expanded safety net, recently implemented in Chile as a response to low pension coverage rates, is introduced into the model to quantify its effects on labor supply, savings and the government budget.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Society for Economic Dynamics in its series 2011 Meeting Papers with number 1136.
Date of creation: 2011
Date of revision:
Contact details of provider:
Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
Web page: http://www.EconomicDynamics.org/society.htm
More information through EDIRC
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.:
- Gong, Xiaodong & van Soest, Arthur & Villagomez, Elizabeth, 2000.
"Mobility in the Urban Labor Market: A Panel Data Analysis for Mexico,"
IZA Discussion Papers
213, Institute for the Study of Labor (IZA).
- Gong, Xiaodong & Van Soest, Arthur & Villagomez, Elizabeth, 2004. "Mobility in the Urban Labor Market: A Panel Data Analysis for Mexico," Economic Development and Cultural Change, University of Chicago Press, vol. 53(1), pages 1-36, October.
- Gong, X. & Soest, A.H.O. van & Villagomez, E., 2000. "Mobility in the Urban Labor Market: A Panel Data Analysis for Mexico," Discussion Paper 2000-46, Tilburg University, Center for Economic Research.
- Magnac, Th, 1991. "Segmented or Competitive Labor Markets," Econometrica, Econometric Society, vol. 59(1), pages 165-87, January.
- Piggot, John & Robalino, David & Jimenez-Martin, Sergi, 2008. "Incentive Effects of Retirement Income Transfers," MPRA Paper 12020, University Library of Munich, Germany.
- Alex Michaelides & Francisco Gomes & Valery Polkovnichenko, 2006.
"Wealth Accumulation and Portfolio Choice with Taxable and Tax-Deferred Accounts,"
Computing in Economics and Finance 2006
23, Society for Computational Economics.
- Gomes, Francisco J & Michaelides, Alexander & Polkovnichenko, Valery, 2005. "Wealth Accumulation and Portfolio Choice with Taxable and Tax-Deferred Accounts," CEPR Discussion Papers 4852, C.E.P.R. Discussion Papers.
- Holzmann, Robert & Palacios, Robert & Zviniene, Asta, 2004. "Implicit pension debt: issues, measurement and scope in international perspective," Social Protection Discussion Papers 30153, The World Bank.
- Alberto Arenas de Mesa & Jere Behrman & David Bravo, 2001. "Characteristics of and determinants of the density of contributions in a Private Social Security System," Working Papers wp077, University of Michigan, Michigan Retirement Research Center.
- Donna B. Gilleskie & David M. Blau, 2006.
"Health insurance and retirement of married couples,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 21(7), pages 935-953.
- David M, Blau & Donna B, Gilleskie, 2003. "Health Insurance and Retirement of Married Couples," Working Papers 2003-41, Centre de Recherche en Economie et Statistique.
- Gindling, T H, 1991. "Labor Market Segmentation and the Determination of Wages in the Public, Private-Formal, and Informal Sectors in San Jose, Costa Rica," Economic Development and Cultural Change, University of Chicago Press, vol. 39(3), pages 584-605, April.
- Sergi Jiménez-Mart�n & Alfonso R. Sánchez Mart�n, 2007.
"An evaluation of the life cycle effects of minimum pensions on retirement behavior,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 22(5), pages 923-950.
- Sergi Jiménez-Martín & Alfonso R. Sánchez Martín, 2003. "An evaluation of the life-cycle effects of minimum pensions on retirement behavior," Working Papers 108, Barcelona Graduate School of Economics.
- Sergi Jiménez-Martín & Alfonso R. Sánchez, 2003. "An evaluation of the life-cycle effects of minimum pensions on retirement behavior," Economics Working Papers 715, Department of Economics and Business, Universitat Pompeu Fabra, revised Jun 2006.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann).
If references are entirely missing, you can add them using this form.