The Chilean Pension Reform Turns 25: Lessons from the Social Protection Survey
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Retirement system
PAYGO
Defined contribution individual accounts
Social Protection Survey
Demography, Population, and Ecology
Family, Life Course, and Society
Social and Behavioral Sciences
Sociology
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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 PrevisiĆ³n Social, EPS), and illustrates some uses of this survey for microeconomic analysis of key aspects of the Chilean system.