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(Partial) privatization social security: The Chilean model - a lesson to follow?


  • Eisen, Roland


This paper examines thoroughly the Chilean Pension Reform, giving first an overview of the mandatory saving plan, the relevant institutions, and the rules for transition from the old to the new system. The main part of the paper contains a critical evaluation of the reform, in particular the macroeconomic performance with respect to capital formation and growth, and the effects on the savings rate as well as on the rates of return and labor market are discussed. Furthermore, the development of capital markets is reviewed. A short critique is presented with respect to intergenerational distribution and risk sharing as well as with respect to the social consequences.

Suggested Citation

  • Eisen, Roland, 2000. "(Partial) privatization social security: The Chilean model - a lesson to follow?," CFS Working Paper Series 2000/13, Center for Financial Studies (CFS).
  • Handle: RePEc:zbw:cfswop:200013

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    References listed on IDEAS

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    7. John McHale, 2001. "The Risk of Social Security Benefit-Rule Changes: Some International Evidence," NBER Chapters,in: Risk Aspects of Investment-Based Social Security Reform, pages 247-290 National Bureau of Economic Research, Inc.
    8. Agarwal, Jamuna Prasad & Nunnenkamp, Peter, 1992. "Methods and sequencing of privatization: what post-socialist countries can learn from Chile," Kiel Working Papers 527, Kiel Institute for the World Economy (IfW).
    9. Sebastian Edwards, 1998. "Interest Rate Volatility, Capital Controls, and Contagion," NBER Working Papers 6756, National Bureau of Economic Research, Inc.
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    11. Casey B. Mulligan & Xavier Sala-i-Martin, 1999. "Social security in theory and practice (I): Facts and political theories," Economics Working Papers 384, Department of Economics and Business, Universitat Pompeu Fabra.
    12. Ross Levine, 1997. "Financial Development and Economic Growth: Views and Agenda," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 688-726, June.
    13. Casey B. Mulligan & Xavier Sala-i-Martin, 1999. "Social Security in Theory and Practice (II): Efficiency Theories, Narrative Theories, and Implications for Reform," NBER Working Papers 7119, National Bureau of Economic Research, Inc.
    14. Peter Diamond, 1998. "The Economics of Social Security Reform," NBER Working Papers 6719, National Bureau of Economic Research, Inc.
    15. Pascal Belan & Philippe Michel & Pierre Pestieau, 1998. "Pareto-Improving Social Security Reform," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 23(2), pages 119-125, December.
    16. Mitchell, Olivia S & Zeldes, Stephen P, 1996. "Social Security Privatization: A Structure for Analysis," American Economic Review, American Economic Association, vol. 86(2), pages 363-367, May.
    17. Queisser, Monika, 1997. "Pension reform and private pension funds in Peru and Colombia," Policy Research Working Paper Series 1853, The World Bank.
    18. Morande, Felipe G., 1998. "Savings in Chile. What went right?," Journal of Development Economics, Elsevier, vol. 57(1), pages 201-228, October.
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    More about this item


    Privatization; Social Security reform; Chile;

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions


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