Systematic Determinants of Pensions in Latin America

No 818, Documentos de Trabajo (working papers) from Department of Economics - dECON

Abstract: In this paper I assess Latin American contributory pension schemes in terms of their role in replacing earnings after retirement. I look for key elements that can explain differences, resulting in useful policy recommendations. My analysis is based on microsimulations of work histories and pension rights in 10 Latin American countries according to current norms and controlled scenarios. I use response surface analysis to summarize the results, performing regression analysis to assess the impact of changes in control variables on the effective replacement rate (ERR). The effects of covariates at scenario level and at regime level are considered. Results show that individual choices and luck are very relevant in determining ERRs. I also find that some policy variables have a great impact. This is the case of the contribution rate. These findings are particularly relevant for the current discussion on pension reform and pension adequacy in Latin America.

Keywords: contribution rate; pension; replacement rate; retirement; social security (search for similar items in EconPapers)
JEL-codes: H55 J14 J26 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2018-11
New Economics Papers: this item is included in nep-age, nep-lam and nep-pbe
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Persistent link: https://EconPapers.repec.org/RePEc:ude:wpaper:0818

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