In search of inclusion: informal sector participation in a voluntary, defined contribution pension system

Renuka Sane and Susan Thomas

Indira Gandhi Institute of Development Research, Mumbai Working Papers from Indira Gandhi Institute of Development Research, Mumbai, India

Abstract: This paper examines who contributes and who persists in contributing in a national, voluntary, defined contributory pension program, where the government provides the incentive of matching contributions of a minimum amount (USD 16). The paper uses proprietary data from a financial services firm where 12 percent of customers (37000 individuals) chose to participate in this program. The evidence shows that only about 50 percent of contributors reach the minimum amount for the co-contribution, but that participants persist in contributing even if they failed to contribute the minimum amount in a given year. While this paper does not provide causal estimates, it does present evidence of considerable interest among the informal sector in a state-run voluntary pension program in an emerging market where access to formal finance is otherwise poor.

Keywords: informal sector workers; pension accounts; matched defined contribution (search for similar items in EconPapers)
JEL-codes: D14 G11 H55 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2013-10
New Economics Papers: this item is included in nep-age and nep-iue
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Related works:
Journal Article: In Search of Inclusion: Informal Sector Participation in a Voluntary, Defined Contribution Pension System (2015)
Working Paper: In Search of Inclusion: Informal Sector Participation in a Voluntary, Defined Contribution Pension System (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ind:igiwpp:2013-022

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