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

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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(03), 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. Alvaro Forteza, 2015. "Are social security programs progressive?," IZA World of Labor, Institute for the Study of Labor (IZA), pages 172-172, July.
    2. 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.
    3. repec:spr:laecrv:v:24:y:2015:i:1:p:1-35 is not listed on IDEAS
    4. repec:lap:journl:598 is not listed on IDEAS
    5. Alvaro Forteza & Irene Mussio, 2012. "Assessing Redistribution in the Uruguayan Social Security System," Journal of Income Distribution, Journal of Income Distribution, vol. 21(1), pages 65-87, March.
    6. 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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