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Welfare, inequality and financial consequences of a multi-pillar pension system. A reform in Peru

Javier Olivera ()

Working Papers of Department of Economics, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven

Abstract: The distributional impact of the structural pension reform in Latin American countries has been largely absent in the economic debate. However, this reform may widen inequality in old-age and reduce welfare. In this paper we study the consequences of implementing a multi-pillar system in one of these countries. We take advantage of available administrative records for Peruvian workers to estimate inequality in pensions, pension debt and welfare. Overall, our results show that the pension debt and inequality can be substantially reduced without welfare losses. Thus, the proposed multi-pillar system allows recovering the principle of solidarity and saves fiscal resources.

Keywords: Pension reform; pension inequality; social security; Latin America; Peru. (search for similar items in EconPapers)
JEL-codes: H55 H63 I30 G23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age and nep-lam
Date: 2009-06
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Working Paper: Welfare, inequality and financial consequences of a multi-pillar pension system. A reform in Peru (2010) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ete:ceswps:ces09.11

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