Pension reforms and employment

Alejandra Cox Edwards

International Economic Journal, 2005, vol. 19, issue 2, 305-319

Abstract: The Chilean social security reform became effective in November 1980, replacing a traditional pay-as-you-go system with a unified system based on a minimum required contribution towards an individual account. The reform lowered the combined contribution rates towards old age and disability pension and tightened the link between contributions and benefits increasing individuals' valuation of contributions. This paper offers estimates of 'money's worth' ratios for 'typical contributors' before and after reform, indicating that the post-reform money's worth of each peso of contribution increased substantially for all groups, and particularly for women. Using aggregate data on employment and output from 1960 to 2002, estimates imply that a 10% reduction in the payroll tax led to a 2% increase in employment, and to a 0.7 point expansion in labour force participation.

Keywords: Pay-as-you-go; unified system; individual account; labour force participation (search for similar items in EconPapers)
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/10168730500080600 (text/html)
Access to full text is restricted to subscribers.

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:taf:intecj:v:19:y:2005:i:2:p:305-319

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RIEJ20

DOI: 10.1080/10168730500080600

Access Statistics for this article

International Economic Journal is currently edited by Jaymin Lee Editor

More articles in International Economic Journal from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().