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Redistribution, Insurance and Incentives to Work in Latin American Pension Programs

Author

Listed:
  • Alvaro Forteza

    (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)

  • Guzmán Ourens

    (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)

Abstract

We present a new database of social security indicators for eleven Latin American countries designed to show how much they promise to pay in return to contributions. The indicators are based on micro-simulations according to existing norms. Our results indicate that most programs are progressive. In most programs, retirement ages do not have a sizeable impact on the rates of return, given the length of service. The length of service has a strong impact on the expected returns to contributions, mostly due to vesting period conditions. Because of this, several pension programs in Latin America may be exacerbating income risk.

Suggested Citation

  • Alvaro Forteza & Guzmán Ourens, 2010. "Redistribution, Insurance and Incentives to Work in Latin American Pension Programs," Documentos de Trabajo (working papers) 1810, Department of Economics - dECON.
    • Handle: RePEc:ude:wpaper:1810
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    File URL: https://hdl.handle.net/20.500.12008/2171
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    References listed on IDEAS

    as
    1. Carmelo Mesa-Lago, 2006. "Private and public pension systems compared: an evaluation of the Latin American experience," Review of Political Economy, Taylor & Francis Journals, vol. 18(3), pages 317-334.
    2. World Bank, 2010. "World Development Indicators 2010," World Bank Publications - Books, The World Bank Group, number 4373, December.
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    Cited by:

    1. Altamirano, Alvaro & Oliveri, María Laura & Bosch, Mariano & Tapia, Waldo, 2023. "Calculating the redistributive impact of pension systems in LAC," LSE Research Online Documents on Economics 120684, London School of Economics and Political Science, LSE Library.
    2. Alvaro Forteza, 2015. "Are social security programs progressive?," IZA World of Labor, Institute of Labor Economics (IZA), pages 172-172, July.
    3. Wei Zheng & Zining Liu & Ruo Jia, 2019. "How private sector participation improves retirement preparation: A case from China," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 44(1), pages 123-147, January.
    4. Leonel Muinelo-Gallo & Ronald Miranda, 2020. "The Behaviour of Social Transfers over the Business Cycle: Empirical Evidence of Uruguay," Hacienda Pública Española / Review of Public Economics, IEF, vol. 233(2), pages 25-54, June.
    5. Gioia de Melo & Nicolás Castiñeiras & Analía Ardente & Oriana Montti & Braulio Zelko & Federico Araya, 2019. "Eligibility for retirement and replacement rates in the Uruguayan multi-pillar pension system (Elegibilidad para el retiro y tasas de reemplazo en el sistema previsional multi-pilar en Uruguay)," Revista Desarrollo y Sociedad, Universidad de los Andes,Facultad de Economía, CEDE, vol. 83(3), pages 105-144, September.
    6. Alvaro Forteza & Irene Mussio, 2012. "Assessing Redistribution in the Uruguayan Social Security System," Journal of Income Distribution, Ad libros publications inc., vol. 21(1), pages 65-87, March.
    7. Alvaro Forteza, 2011. "Assessing Redistribution within Social Insurance Systems.The cases of Argentina, Brazil, Chile, Mexico and Uruguay," Documentos de Trabajo (working papers) 1311, Department of Economics - dECON.
    8. Pedro Moncarz, 2015. "Implicit redistribution within Argentina’s social security system: a micro-simulation exercise," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 24(1), pages 1-35, December.
    9. Anna M. Caristo, 2015. "Incentivos al trabajo y cobertura de riesgos de los programas de pensiones: el caso de Uruguay," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 61, pages 81-126, January-D.
    10. Altamirano Montoya, Álvaro & Oliveri, María Laura & Bosch, Mariano & Tapia Troncoso, Waldo, 2023. "Calculating the Redistributive Impact of Pension Systems in LAC," IDB Publications (Working Papers) 13185, Inter-American Development Bank.

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    More about this item

    Keywords

    Latin America; Social Security; Internal Rate of Return.;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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