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Early pension withdrawals in Chile during the pandemic

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  • Fuentes, Olga M.
  • Mitchell, Olivia S.
  • Villatoro, Félix

Abstract

At the onset of the Covid-19 crisis, and with one of the largest and best-funded defined contribution programs in Latin America, Chile held over USD $200 bn in assets (or more than 80% of GDP). Reacting to populist pressures during the pandemic, however, the Congress gave non-retired participants three separate opportunities to tap into their retirement accounts, leaving some 4.2 million participants with zero retirement savings and draining around $50 bn from the system. This paper explores several hypotheses regarding why people withdrew their pension money early, and it also presents evidence regarding the likely impact of this short-term policy on long-term retirement wellbeing. We conclude with lessons for global policymakers seeking to protect pension assets critical for retirement security.

Suggested Citation

  • Fuentes, Olga M. & Mitchell, Olivia S. & Villatoro, Félix, 2025. "Early pension withdrawals in Chile during the pandemic," Journal of Pension Economics and Finance, Cambridge University Press, vol. 24(1), pages 69-94, January.
    • Handle: RePEc:cup:jpenef:v:24:y:2025:i:1:p:69-94_5
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