Tax Incentives for Retirement Savings: Macro and Welfare Effects in an OLG-GE Model with Liquidity Constraints and Heterogeneous Consumers

Rodrigo Cifuentes

Working Papers Central Bank of Chile from Central Bank of Chile

Abstract: This paper uses an Overlapping Generations-General Equilibrium model to study the impact of the introduction of tax incentives to voluntary savings for retirement in Chile. The paper analyzes the macro impact of the reform, driven mainly by its effect on savings and capital accumulation, and its effect on welfare. A setting with heterogeneous consumers is considered where agents differ in their income levels, and therefore on the relevance that tax-incentives have for them. Both the transition and the final steady state are analyzed. The heterogeneity modeled allows unveiling important distributive effects of the reform, in particular during the transition to the new steady state.

Date: 2003-12
New Economics Papers: this item is included in nep-dge and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:chb:bcchwp:242

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