PARC Working Paper Series
Document Type
Working Paper
Date of this Version
2-17-2011
Abstract
Chile’s innovative privatized pension system has been lauded as possible model for Social Security system overhauls in other countries, yet it has also been critiqued for not including a strong safety net for the uncovered sector. In response, the Bachelet government in 2008 implemented reforms to rectify this shortcoming. Here we offer the first systematic effort to directly evaluate the reform’s impacts, focusing on the new Basic Solidarity Pension for poor households with at least one person age 65+. Using the Social Protection Survey, we show that targeted poor households received about 2.4 percent more household annual income, with little evidence of crowding-out of private transfers. We also suggest that recipient household welfare probably increased due to slightly higher expenditures on basic consumption including healthcare, more leisure hours, and improved self-reported health. While measured short-run effects are small, follow-ups will be essential to gauge longer-run outcomes.
Keywords
Basic Solidarity Pension, Chile, Expenditures, Health, Pension Fund Managers, Pensions, Poverty, Social Protection Survey, Social Security
Included in
Demography, Population, and Ecology Commons, Family, Life Course, and Society Commons, Labor Economics Commons, Other Economics Commons
Date Posted: 02 March 2011
This document has been peer reviewed.
Comments
Behrman, Jere R., Maria Cecilia Calderon, Olivia S. Mitchell, Javiera Vasquez, and David Bravo. 2011. “First-Round Impacts of the 2008 Chilean Pension System Reform.” PARC Working Paper Series, WPS 11-01.