PENSION REFORM AND CAPITAL MARKETS: ARE THERE ANY (HARD) LINKS?

Eduardo Walker () and Fernando Lefort

Abante, 2002, vol. 5, issue 2, 77-149

Abstract: The creation of fully funded, privately managed pension systems may have significant positive direct effects on savings, growth and welfare. However, the indirect link, via capital market development, may be as important. This hypothesis is verified with evidence from emerging economies that have recently engaged in such reforms with a focus on Chile, Argentina and Peru. There is abundant qualitative and anecdotal evidence that relates pension reform with the accumulation of "institutional capital", with the existence of an adaptive legal framework, with increased specialization, transparency and integrity and even with better corporate governance. Evidence of increased financial innovation is also found while there is little evidence of bank disintermediation. In addition, time-series and panel data evidence is generally consistent with the following hypothetical effects: a reduction in the cost of capital; lower security-price volatility; and higher traded volumes. The evidence suggests that the indirect channel via capital market development may have important implications for economic growth and productivity.

Keywords: Pensions; Reform; Capital markets; Emerging markets; Economic growth (search for similar items in EconPapers)
JEL-codes: G23 O16 O54 (search for similar items in EconPapers)
Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (44)

Downloads: (external link)
http://www.abante.cl/files/ABT/Contenidos/Vol-5-N2/Walker%20Lefort.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pch:abante:v:5:y:2002:i:2:p:77-149

Ordering information: This journal article can be ordered from

Access Statistics for this article

Abante is currently edited by Eduardo Walker

More articles in Abante from Escuela de Administracion. Pontificia Universidad Católica de Chile. Contact information at EDIRC.
Bibliographic data for series maintained by Eduardo Walker ().