Personal Retirement Accounts and Saving

Emma Aguila

No WR-600, Working Papers from RAND Corporation

Abstract: Many countries are including personal retirement accounts (PRAs) as part of their social security systems. PRA systems boost private savings at the macro level by converting a government financial liability into private wealth. At the micro level, however, crowing-out effects on household savings could be offsetting some of this increase in private savings and may lead to inadequate preparedness for retirement. The author tests this hypothesis by using the Mexican social security reform of 1997 as a natural experiment, because only part of that system was changed from pay-as-you-go to PRAs. She finds that social security reform with PRAs does indeed crowd out household savings and recommends strengthening voluntary savings for retirement along with social security reform.

Keywords: Social security reform; household saving; public policy evaluation (search for similar items in EconPapers)
JEL-codes: D91 H55 J26 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2008-09
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Citations: View citations in EconPapers (5)

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Journal Article: Personal Retirement Accounts and Saving (2011)
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