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A Simulation Model for the Colombian Pension System

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  • Oscar Becerra

    (Universidad de los Andes)

Abstract

This article presents the CEDE Pension Model, a microsimulation tool designed to project key variables of Colombia’s pension system. The model integrates administrative data, household surveys, and institutional parameters to simulate labor histories using Markov chains and to project the number of older adults who will receive pension benefits through 2100. Its design enables the evaluation of policy options for old-age economic protection, highlighting trade-offs across coverage, equity and progressivity, adequacy, and fiscal sustainability.

Suggested Citation

  • Oscar Becerra, 2025. "A Simulation Model for the Colombian Pension System," Documentos CEDE 2025-31, Universidad de los Andes, Facultad de Economía, CEDE.
    • Handle: RePEc:col:000089:021633
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    File URL: https://repositorio.uniandes.edu.co/bitstreams/handle/1992/77167/dcede2025-31.pdf
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    File URL: https://repositorio.uniandes.edu.co/bitstreams/handle/1992/77167/dcede2025-31.pdf
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    References listed on IDEAS

    as
    1. Acosta, Olga Lucía & Ayala, Ulpiano, 2001. "Reformas pensionales y costos fiscales en Colombia," Financiamiento para el Desarrollo 5093, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    2. Nicholas Barr & Peter Diamond, 2006. "The Economics of Pensions," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 22(1), pages 15-39, Spring.
    3. Auerbach, Alan J & Kotlikoff, Laurence J, 1987. "Evaluating Fiscal Policy with a Dynamic Simulation Model," American Economic Review, American Economic Association, vol. 77(2), pages 49-55, May.
    4. Peter Diamond & Nicholas Barr, 2006. "(UBS Pensions Series 041) The Economics of Pensions," FMG Discussion Papers dp563, Financial Markets Group.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

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    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General

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