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The Chilean Pension Reform Turns 25: Lessons From the Social Protection Survey

Author

Listed:
  • Alberto Arenas de Mesa
  • David Bravo
  • Jere R. Behrman
  • Olivia S. Mitchell
  • Petra E. Todd

Abstract

In 1980, Chile dramatically reformed its retirement system, replacing what was an old insolvent PAYGO program with a new structure that relies heavily on funded defined contribution individual accounts. In addition, eligibility and benefit requirements were standardized, and a safety net for old-age poverty was strengthened. Twenty-five years after this reform, the Chilean model is being re-assessed, in terms of coverage, contribution, investment, and retirement benefit outcomes. This paper introduces a recently-developed longitudinal survey of individual respondents in Chile, the Social Protection Survey (or Encuesta de Previsión Social, EPS), and illustrates some uses of this survey for microeconomic analysis of key aspects of the Chilean system.

Suggested Citation

  • Alberto Arenas de Mesa & David Bravo & Jere R. Behrman & Olivia S. Mitchell & Petra E. Todd, 2006. "The Chilean Pension Reform Turns 25: Lessons From the Social Protection Survey," NBER Working Papers 12401, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:12401
    Note: AG PE
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Justine Hastings & Olivia S. Mitchell, 2010. "How Financial Literacy and Impatience Shape Retirement Wealth and Investment Behaviors," Working Papers wp233, University of Michigan, Michigan Retirement Research Center.
    2. Jere R. Behrman & Olivia S. Mitchell & Cindy Soo & David Bravo, 2010. "Financial Literacy, Schooling, and Wealth Accumulation," NBER Working Papers 16452, National Bureau of Economic Research, Inc.
    3. Annamaria Lusardi & Olivia S. Mitchell, 2014. "The Economic Importance of Financial Literacy: Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 52(1), pages 5-44, March.
    4. Asher, Mukul G. & Vasudevan, Deepa, 2008. "Lessons for Asian Countries from Pension Reforms in Chile," PIE/CIS Discussion Paper 381, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    5. Estelle James & Alejandra Cox Edwards & Rebeca Wong, 2012. "The Gender Impact of Pension Reform," World Bank Other Operational Studies 13046, The World Bank.
    6. Landerretche, Oscar M. & Martínez, Claudia, 2013. "Voluntary savings, financial behavior, and pension finance literacy: evidence from Chile," Journal of Pension Economics and Finance, Cambridge University Press, vol. 12(03), pages 251-297, July.
    7. James, Estelle & Iglesias, Augusto & Cox Edwards, Alejandra, 2008. "Disability insurance with pre-funding and private participation : the Chilean model," Social Protection and Labor Policy and Technical Notes 42268, The World Bank.
    8. Mehdi Ben Braham, 2007. "Structural Pension Reform: The Chilean Experience," NFI Working Papers 2007-WP-20, Indiana State University, Scott College of Business, Networks Financial Institute.
    9. Javier OLIVERA, 2009. "Welfare, inequality and financial consequences of a multi-pillar pension system. A reform in Peru," Working Papers Department of Economics ces09.11, KU Leuven, Faculty of Economics and Business, Department of Economics.
    10. 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.
    11. Estelle James & Alejandra CoxEdwards & Augusto Iglesias, 2007. "The Impact of Private Participation on Disability Costs: Evidence from Chile," Working Papers wp161, University of Michigan, Michigan Retirement Research Center.
    12. Annamaria Lusardi & Olivia Mitchell, 2006. "Financial Literacy and Retirement Preparedness: Evidence and Implications for Financial Education Programs," Working Papers wp144, University of Michigan, Michigan Retirement Research Center.
    13. David Bravo Urrutia & Olivia S. Mitchell & Petra Todd, 2007. "Learning from the Chilean Experience: The Determinants of Pension Switching," Working Papers wp266, University of Chile, Department of Economics.
    14. Dayoub, Mariam & Lasagabaster, Esperanza, 2008. "General trends in competition policy and investment regulation in mandatory defined contribution markets in Latin America," Policy Research Working Paper Series 4720, The World Bank.
    15. Ramon Moreno & Marjorie Santos, 2008. "Pension systems in EMEs: implications for capital flows and financial markets," BIS Papers chapters,in: Bank for International Settlements (ed.), Financial globalisation and emerging market capital flows, volume 44, pages 45-69 Bank for International Settlements.
    16. Petra Todd & Viviana Vélez-Grajales, 2008. "How Pension Rules Affect Work and Contribution Patterns: A Behavioral Model of the Chilean Privatized Pension System," Working Papers wp193, University of Michigan, Michigan Retirement Research Center.
    17. Olivera, Javier, 2010. "Recuperando la Solidaridad en el Sistema Peruano de Pensiones. Una Propuesta de Reforma
      [Recovering the Principle of Solidarity in the Peruvian Pension System. A reform proposal]
      ," MPRA Paper 60194, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • 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

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