Propuesta de una Pensión Universal Proporcional en México

Alejandro Villagomez and Gabriel Ramírez

No DTE 561, Working Papers from CIDE, División de Economía

Abstract: Contributory pension system coverage has been low. High mobility between formal and the informal sector results in low contribution density which does not guarantee a minimum pension. The state has created cash transfer programs, which can disincentive formality. This paper proposes a proportional pension for formal employees, which replaces the fixed cash transfer, following the experience of Chile (2008). We follow the Valdés-Prieto approach (2008), which minimizes labour-market distortions. Under the assumption of linear income trajectory, we show that the total value of pensions can increase in 45.6% on average, and fiscal savings in 14.8% when compared to a non-contributory pension program as '65 y Más'.

Keywords: Contributory pension system; coverage; Mexico; formal sector; informal sector (search for similar items in EconPapers)
JEL-codes: H53 H55 I38 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2013-10
New Economics Papers: this item is included in nep-age and nep-iue
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