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Is Latin America retreating from individual retirement accounts?

Author

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  • Bertranou, Fabio
  • Calvo, Esteban
  • Bertranou, Evelina

Abstract

This brief reviews two rounds of pension reforms in ten Latin American countries to determine whether they are moving away from individual retirement accounts (IRAs). Although the idea is provocative, we conclude that the notion of “moving away from IRAs” is insufficient to characterize the new politics of pension reform. As opposed to the politics of enactment of IRAs of the late twentieth century, pension reform in Latin America in recent years has combined significant comeback of public components in old-age income support with improvement of IRAs. Clearly, the policy prescriptions that were most influential during the first round of reforms in Latin America have been re-evaluated. The World Bank and other organizations that promoted IRAs have recognized that pension reform should pay more attention to poverty reduction, coverage and equity, and to protect participants from market risks. The experience and challenges faced by countries that introduced IRAs, the changes in policies by international financing institutions, and the recent financial volatility and heavy losses experienced in financial markets may have tempered the enthusiasm of other countries from applying the same type of reforms. Scholars and policymakers around the globe could benefit from looking closely at these changes in pension policy.

Suggested Citation

  • Bertranou, Fabio & Calvo, Esteban & Bertranou, Evelina, 2009. "Is Latin America retreating from individual retirement accounts?," MPRA Paper 17422, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:17422
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    File URL: https://mpra.ub.uni-muenchen.de/17422/1/MPRA_paper_17422.pdf
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    References listed on IDEAS

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    1. Joaquin Vial & Angel Melguizo, 2008. "Moving from Pay as You Go to Privately Managed Individual Pension Accounts: What have we learned after 25 years of the Chilean Pension Reform?," Working Papers 0805, BBVA Bank, Economic Research Department.
    2. Rafael Rofman & Leonardo Lucchetti & Guzmán Ourens, 2010. "Pension Systems in Latin America: Concepts and Measurements of Coverage," Documentos de Trabajo (working papers) 0510, Department of Economics - dECON.
    3. repec:idb:brikps:59998 is not listed on IDEAS
    4. Calvo, Esteban & Williamson, John B., 2006. "Old-Age Pension Reform and Modernization Pathways: Lessons for China from Latin America," MPRA Paper 4872, University Library of Munich, Germany, revised 2007.
    5. Augusto Iglesias-Palau, 2009. "Pension Reform in Chile Revisited: What Has Been Learned?," OECD Social, Employment and Migration Working Papers 86, OECD Publishing.
    6. Mesa-Lago, Carmelo, 2004. "Las reformas de pensiones en América Latina y su impacto en los principios de la seguridad social," Financiamiento para el Desarrollo 144, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    7. World Bank, 2007. "Argentina : Facing the Challenge of Ageing and Social Security," World Bank Other Operational Studies 7989, The World Bank.
    8. Barr, Nicholas & Diamond, Peter, 2008. "Reforming Pensions: Principles and Policy Choices," OUP Catalogue, Oxford University Press, number 9780195311303.
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    Cited by:

    1. Barrientos, Armando, 2011. "On the Distributional Implications of Social Protection Reforms in Latin America," WIDER Working Paper Series 069, World Institute for Development Economic Research (UNU-WIDER).
    2. Camila Arza, 2017. "The expansion of economic protection for older adults in Latin America: Key design features of non-contributory pensions," WIDER Working Paper Series 029, World Institute for Development Economic Research (UNU-WIDER).
    3. Rofman, Rafael & Oliveri, Maria Laura, 2012. "Pension coverage in Latin America : trends and determinants," Social Protection and Labor Policy and Technical Notes 70926, The World Bank.

    More about this item

    Keywords

    pension reform; pension policy; social security; retirement; Latin America;

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • H5 - Public Economics - - National Government Expenditures and Related Policies

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