The redistributive effect of pensions. The case of Uruguay

Alvaro Forteza () and Diego Tuzman ()

No 924, Documentos de Trabajo (working papers) from Department of Economics - dECON

Abstract: In this paper, we present estimations of the distribution and redistribution of per-period income that can be associated to social security using two approaches, one that follows the conventional practice of treating pensions as government transfers and an- other one that proposes to measure pension income as the return of pension wealth. Using data for Uruguay, we find that the former approach estimates less inequality in the presence of pensions and much larger decrease in inequality due to pensions than the latter. We show that the implicit assumption that individuals would not increase voluntary savings in the absence of pensions contributes to a strong apparent equalizing effect of pensions. As several scholars have warned, this assumption is not warranted.

Keywords: Pensions; Distribution; Redistribution; Fiscal incidence; Fiscal policy (search for similar items in EconPapers)
JEL-codes: D31 H55 I38 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2024-09
New Economics Papers: this item is included in nep-age, nep-ltv and nep-pbe
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Persistent link: https://EconPapers.repec.org/RePEc:ude:wpaper:0924

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