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Propuesta de una Pensión Universal Proporcional en México

Author

Listed:
  • Alejandro Villagómez

    (Division of Economics, CIDE)

  • Gabriel Ramírez

Abstract

Contributory pension system coverage has been low. High mobility between formal and the informal sector results in low contribution density which does not guarantee a minimum pension. The state has created cash transfer programs, which can disincentive formality. This paper proposes a proportional pension for formal employees, which replaces the fixed cash transfer, following the experience of Chile (2008). We follow the Valdés-Prieto approach (2008), which minimizes labour-market distortions. Under the assumption of linear income trajectory, we show that the total value of pensions can increase in 45.6% on average, and fiscal savings in 14.8% when compared to a non-contributory pension program as '65 y Más'.

Suggested Citation

  • Alejandro Villagómez & Gabriel Ramírez, 2013. "Propuesta de una Pensión Universal Proporcional en México," Working papers DTE 561, CIDE, División de Economía.
    • Handle: RePEc:emc:wpaper:dte561
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    File URL: http://www.economiamexicana.cide.edu/RePEc/emc/pdf/DTE/DTE561.pdf
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    More about this item

    Keywords

    Contributory pension system; coverage; Mexico; formal sector; informal sector;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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