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Redistribution, insurance and incentives to work in Latin-American pension programs

Author

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  • FORTEZA, ALVARO
  • OURENS, GUZMÁN

Abstract

We present a new database of social security indicators for 11 Latin-American countries designed to show how much they promise to pay in return to contributions. These are based on micro-simulations according to existing norms. We use response-surface analysis to characterize simulation results. Our results indicate that most programs are progressive. The length of service (LOS) has a strong impact on the expected returns to contributions. In several programs, the expected rates of return exhibit striking discontinuities in the LOS, mostly due to vesting period conditions. This implies these programs may be exacerbating income risk.

Suggested Citation

  • Forteza, Alvaro & Ourens, Guzmán, 2012. "Redistribution, insurance and incentives to work in Latin-American pension programs," Journal of Pension Economics and Finance, Cambridge University Press, vol. 11(3), pages 337-364, July.
    • Handle: RePEc:cup:jpenef:v:11:y:2012:i:03:p:337-364_00
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    Cited by:

    1. 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.
    2. 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.
    3. Alvaro Forteza, 2015. "Are social security programs progressive?," World of Labour, LISER, pages 172-172, July.
    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 & Nicol�s Casti�eiras & Anal�a 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.
    6. 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.
    7. 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.
    8. 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.
    9. 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.

    More about this item

    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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