 Pension Economics Paradigms and Pension System Reforms in Uruguay – Compliance AnalysisEuropean Research Studies Journal, 2025, vol. XXVIII, issue 1, 559-574 Abstract: Purpose: The study examines Uruguay’s pension system reforms in the context of pension economics theories, particularly the overlapping generations model (OLG), the life-cycle theory, and welfare economics. The research evaluates the alignment of Uruguayan reforms with these theoretical frameworks and their impact on fiscal sustainability, benefit adequacy, and income redistribution. Design/Methodology/Approach: The study adopts a qualitative research approach, utilizing a comparative analysis of pension system reforms. The research relies on legislative documents, scientific literature, and statistical data from institutions such as the OECD, the World Bank, and the IMF. The study assesses the impact of pension reforms through theoretical models and empirical evidence. Findings: The 1996 reform, which introduced a mixed system, and the 2023 reform, which raised the retirement age, were intended to enhance fiscal stability and pension system sustainability. However, while the reforms align with pension economics principles, their effectiveness remains limited. The study finds that the capital-funded pension pillar (AFAP) failed to achieve the expected efficiency due to high administrative costs and low investment returns, raising the retirement age improved fiscal stability, but it also exacerbated social inequalities, particularly for low-income workers and additional redistributive mechanisms and flexible retirement options are needed to enhance pension adequacy and system fairness. Practical Implications: The findings highlight the challenges of implementing pension system reforms in response to demographic shifts. The study suggests that policy adjustments should focus on reducing administrative costs, increasing transparency, and promoting voluntary pension savings. Additionally, a minimum guaranteed pension and adjustments to pension contribution structures could help improve benefit adequacy and social equity. Originality/Value: The study contributes to pension economics literature by providing an in-depth evaluation of Uruguay’s pension reforms from a theoretical and empirical perspective. The analysis offers policy recommendations relevant to countries facing similar demographic and fiscal challenges. Keywords: Fiscal sustainability; pension system reform; income redistribution; retirement age; social security; welfare economics. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ers:journl:v:xxviii:y:2025:i:1:p:559-574 Access Statistics for this article More articles in European Research Studies Journal from European Research Studies Journal |
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