The effect of Covid pension withdrawals and the Universal Guaranteed Pension on the income of future retirees in Chile

No 1176, BIS Working Papers from Bank for International Settlements

Abstract: Chile implemented large pension withdrawals during the Covid pandemic. Afterwards, Chile increased non-contributory benefits in a quasi-universal scheme. Simulating future pensions, I show that the average loss in contributory pension income is 27.9%, with losses of 23.9% and 31.4% for men and women, respectively. After accounting for public transfers, the average loss in total pension income is just 6.2%, with losses of 7.5% and 5.2% for men and women, respectively. Current retirees lost just 1.1% of their pension income after accounting for the government transfers. The state may end up covering 92% of the total value of the pension withdrawals through increased transfers.

Keywords: pension wealth; Covid pandemic; fiscal costs (search for similar items in EconPapers)
JEL-codes: D14 H55 O54 (search for similar items in EconPapers)
Date: 2024-03
New Economics Papers: this item is included in nep-age and nep-pbe
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