Assessing Chile’s pension system: challenges and reform options

Christopher Evans and Samuel Pienknagura

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper takes stock of Chile’s defined contribution pension system and assesses reform options aimed at increasing replacement rates. An international comparison shows that, despite being quite influential when established, it is now delivering low replacement rates relative to OECD peers, as its parameters did not adapt over time to changing demographics, declining global returns, higher-than-expected informality in the labor market, and, more recently, to legislation allowing for pension savings withdrawals to counter the effects from the COVID-19 pandemic. We find that a reform that raises contribution rates and the retirement age would significantly improve replacement rates and lower fiscal costs associated with the system, especially if accompanied by complementary policies to boost workers’ contribution density.

Keywords: Chile; fiscal costs; pensions; replacement rates (search for similar items in EconPapers)
JEL-codes: D14 H30 H55 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2024-03-08
New Economics Papers: this item is included in nep-age
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Published in Economía, 8, March, 2024, 23(1), pp. 50 – 73. ISSN: 1529-7470

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http://eprints.lse.ac.uk/122536/ Open access version. (application/pdf)

Related works:
Working Paper: Assessing Chile's Pension System: Challenges and Reform Options (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:122536

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