Economic Crises and Globalisation as Drivers of Pension Privatisation: an Empirical Analysis

Markus Leibrecht and Joelle H. Fiong
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Markus Leibrecht: Henley Business School, Malaysia Campus
Joelle H. Fiong: Nanyang Business School, Nanyang Technological University

ICMA Centre Discussion Papers in Finance from Henley Business School, University of Reading

Abstract: Pension systems are core institutional arrangements that are expected to be stable and reliable over consecutive generations. Nevertheless, reforms in pension provision intensified over the past decades, with several countries opting for privatisation of their pension system. We ask which factors lead governments to privatise pension systems and focus on economic crises and different facets of increased global pressures. We conduct duration analyses on a cross-section of nearly 100 economies among which 28 privatise their pension system between 1981 and 2012. Consistent with the crisis-begets-reform hypothesis, we find that severe economic crises speed up reform implementation. Likewise, high growth in economic and political globalisation is conducive for pension privatisation. These findings are robust to a variety of alternations in the empirical methodology.

Keywords: economic crisis; pension reform; globalisation; duration analysis; privatisation (search for similar items in EconPapers)
JEL-codes: H11 H12 H55 P11 (search for similar items in EconPapers)
Date: 2017-08
New Economics Papers: this item is included in nep-age, nep-pbe and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:rdg:icmadp:icma-dp2017-05

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