IDEAS home Printed from
   My bibliography  Save this article

The Structural Pension Reform in Chile: Effects, Comparisons with Other Latin American Reforms, and Lessons


  • Alberto Arenas de Mesa
  • Carmelo Mesa-Lago


Chile pioneered a structural reform in Latin America that privatized its public pension system and influenced similar reforms in another nine countries. Twenty-five years later, this article evaluates the macroeconomic, microeconomic, and social effects of this reform in Chile and the other countries in the region, and extracts lessons from those experiences. Fiscal costs of the reform have been high and prolonged, exceeded capital accumulation, and had a negative impact on national savings, but Chile's reform has contributed to the development of capital markets; employer's contributions were eliminated or reduced in half of the countries and the worker's share in the total contribution averages 65 per cent; competition is afflicted by a small number of administrators and a high level of concentration; administrative costs are high and stagnant; capital returns are fair but declining; portfolio diversification has been achieved only in Chile and Peru; labour-force coverage has declined in all ten countries, and gender and income inequalities have expanded. Copyright 2006, Oxford University Press.

Suggested Citation

  • Alberto Arenas de Mesa & Carmelo Mesa-Lago, 2006. "The Structural Pension Reform in Chile: Effects, Comparisons with Other Latin American Reforms, and Lessons," Oxford Review of Economic Policy, Oxford University Press, vol. 22(1), pages 149-167, Spring.
  • Handle: RePEc:oup:oxford:v:22:y:2006:i:1:p:149-167

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    References listed on IDEAS

    1. Woodford, Michael, 1990. "Learning to Believe in Sunspots," Econometrica, Econometric Society, vol. 58(2), pages 277-307, March.
    2. Lucas, Robert E, Jr, 1973. "Some International Evidence on Output-Inflation Tradeoffs," American Economic Review, American Economic Association, vol. 63(3), pages 326-334, June.
    3. Michael Woodford, 2001. "Imperfect Common Knowledge and the Effects of Monetary Policy," NBER Working Papers 8673, National Bureau of Economic Research, Inc.
    4. Lucas, Robert Jr., 1972. "Expectations and the neutrality of money," Journal of Economic Theory, Elsevier, vol. 4(2), pages 103-124, April.
    5. Winkler, Bernhard, 2000. "Which kind of transparency? On the need for clarity in monetary policy-making," Working Paper Series 0026, European Central Bank.
    6. Jensen, Henrik, 2002. " Optimal Degrees of Transparency in Monetary Policymaking," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(3), pages 399-422, September.
    7. Carare, Alina & Stone, Mark R., 2006. "Inflation targeting regimes," European Economic Review, Elsevier, vol. 50(5), pages 1297-1315, July.
    8. Howitt, Peter & McAfee, R Preston, 1992. "Animal Spirits," American Economic Review, American Economic Association, vol. 82(3), pages 493-507, June.
    9. Michael Woodford, 1999. "Optimal monetary policy inertia," Proceedings, Federal Reserve Bank of San Francisco.
    10. Petra M. Geraats, 2002. "Central Bank Transparency," Economic Journal, Royal Economic Society, vol. 112(483), pages 532-565, November.
    11. Stephen Morris & Hyun Song Shin, 2002. "Social Value of Public Information," American Economic Review, American Economic Association, vol. 92(5), pages 1521-1534, December.
    12. Azariadis, Costas, 1981. "Self-fulfilling prophecies," Journal of Economic Theory, Elsevier, vol. 25(3), pages 380-396, December.
    13. Alan S. Blinder, 1999. "Central Banking in Theory and Practice," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522608, January.
    14. Carol Corrado, 1986. "Reducing uncertainty in current analysis and projections: the estimation of monthly GNP," Special Studies Papers 209, Board of Governors of the Federal Reserve System (U.S.).
    15. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 797-817.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Barr, Nicholas, 2006. "Pensions: overview of the issues," LSE Research Online Documents on Economics 2631, London School of Economics and Political Science, LSE Library.
    2. Javier Olivera, 2014. "The effects of a multi-pillar pension reform: The case of Peru," Working Papers 2014-21, Peruvian Economic Association.
    3. Javier Olivera & Blanca Zuluaga, 2014. "The Ex‐Ante Effects Of Non‐Contributory Pensions In Colombia And Peru," Journal of International Development, John Wiley & Sons, Ltd., vol. 26(7), pages 949-973, October.
    4. Emma Aguila & Michael D. Hurd & Susann Rohwedder, 2008. "Pension Reform in Mexico: The Evolution of Pension Fund Management Fees and their Effect on Pension Balances," Working Papers wp196, University of Michigan, Michigan Retirement Research Center.
    5. Park, Donghyun & Estrada, Gemma, 2012. "Developing Asia’s Pension Systems and Old-Age Income Support," ADBI Working Papers 358, Asian Development Bank Institute.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:oxford:v:22:y:2006:i:1:p:149-167. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.