Pooling, Savings, and Prevention Mitigating the Risk of Old Age Poverty in Chile
74 Pages Posted: 20 Apr 2016
Date Written: May 21, 2002
Abstract
Using data collected in a survey on risk and social insurance in Chile, Packard finds that workers who entered the labor market after the pension reform of 1981 have a greater "contribution density" than those who contributed to the previous social security system. Further, the expectation of care from children and the amount spent on their education significantly lowers the likelihood of contribution to the pension system. Workers who have met the contributory requirements to qualify for the minimum pension guaranteed by the government are significantly less likely to continue making contributions. The likelihood of contributions beyond the eligibility threshold being lowered further, the greater the market rental value of respondents' homes. Furthermore, individuals with a greater tolerance for risk contribute, suggesting that there are retirement security investments in Chile that are perceived as relatively less risky than saving in the reformed pension system. The results indicate that housing could be one such investment.
This paper - a product of the Human Development Sector Unit, Latin America and the Caribbean Region - is part of a regional study on social security reform.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Pension Reform, Financial Market Development, and Economic Growth: Preliminary Evidence from Chile
-
Economic Reforms and Labor Markets: Policy Issues and Lessons from Chile
-
Revealed Preference and Self-Insurance: Can We Learn from the Self-Employed in Chile?
By Abigail Barr and Truman G. Packard
-
The 1997 Pension Reform in Mexico
By Gloria Grandolini and Luis Cerda
-
A Framework for the Analysis of Pension and Unemployment Benefit Reform in Poland
-
Political Risk Versus Market Risk in Social Security
By John B. Shoven and Sita N. Slavov
-
Protecting the Old and Promoting Growth: A Defense of Averting the Old Age Crisis
-
Is There a Positive Incentive Effect from Privatizing Social Security? Evidence from Latin America