Pension Reform, Financial Market Development, and Economic Growth: Preliminary Evidence From Chile

Robert Holzmann

No 1996/094, IMF Working Papers from International Monetary Fund

Abstract: The Chilean pension reform of 1981, in which Chile moved from an unfunded to a funded scheme, is considered to have contributed to this country’s excellent economic performance since the mid-1980s. The paper highlights the theoretical underpinnings of the claimed economic effects and presents empirical data and preliminary econometric testing of the conjectured growth, capital formation, and saving effects. The empirical evidence is consistent with most of the claims. In particular, the direct impact of financial market development on private saving is found to be negative, which underscores the importance of sound fiscal policy and public saving to support the transition.

Keywords: WP; financial market; economic growth; labor market; private sector; rate of return; saving rate; market activity; stock market exchange; investment volume; investment rate; labor market participation; Pension spending; Pension reform; Private savings; Financial sector development; Capital formation; Central and Eastern Europe (search for similar items in EconPapers)
Pages: 52
Date: 1996-08-01
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Citations: View citations in EconPapers (38)

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Journal Article: Pension Reform, Financial Market Development, and Economic Growth: Preliminary Evidence from Chile (1997)
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