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Retirement Systems in Developed and Developing Countries: Institutional Features, Economic Effects, and Lessons for Economies in Transition

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  • Olivia S. Mitchell
Abstract
Multiple-pillar retirement systems have widely differing roles for private retirement savings, government regulation and insurance of private savings vehicles, and government provision of old-age income support. Despite their diversity, and despite the fact that public and private sector retirement systems command a great deal of wealth and have potentially powerful effects on labor and capital markets, they are often overlooked in structural analyses of country problems and prospects. This paper examines important institutional features of retirement systems in developed and developing countries, and outlines what is known about their economic effects. Also identified are ways in which public and private retirement systems affect the process of economic adjustment, with special attention to the costs and benefits of encouraging early retirement. The review shows that a coherent reform plan for a retirement system must identify how much old-age income security is affordable, how the government and private sector can address private market failures in providing this security, and how these objectives can be attained given available financing mechanisms. There is evidence that many retirement systems will be forced to change a great deal in the next few decades. In some cases, retirement benefits will have to be reduced (perhaps by imposing a means test), the age for early retirement will have to be raised, multiple-pillar plans must be integrated and streamlined so as to rationalize work incentives, and the incentives and opportunities for private saving will be increased. In any case, using high-cost long-term retirement systems to mitigate short- and medium-term unemployment problems will probably prove costly and inefficient as a solution to problems faced by economies in transition.
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  • Olivia S. Mitchell, "undated". "Retirement Systems in Developed and Developing Countries: Institutional Features, Economic Effects, and Lessons for Economies in Transition," Pension Research Council Working Papers 94-3, Wharton School Pension Research Council, University of Pennsylvania.
    • Handle: RePEc:wop:pennpr:94-3
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    Cited by:

    1. Ricardo Bebczuk & Alberto Musalem & María Luisa Streb, 2011. "Suggesting Guidelines for Public Pension Funds Governance," Department of Economics, Working Papers 089, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata.
    2. Naqeeb Shah & Basharat Hussain & Samiullah Paracha & Muhammad Shakil Ahmad, 2019. "Impact of Psycho-Social Predictors on the Quality of Life of the Elderly in Pakistan," Proceedings of the 12th International RAIS Conference, April 3-4, 2019 34NS, Research Association for Interdisciplinary Studies.
    3. Lok Sang Ho, 1997. "A Universal Fully Funded Pension Scheme," Contemporary Economic Policy, Western Economic Association International, vol. 15(3), pages 13-20, July.
    4. Jae Yeon Park & Arlette Saint Ville & Timothy Schwinghamer & Hugo Melgar-Quiñonez, 2019. "Heterogeneous factors predict food insecurity among the elderly in developed countries: insights from a multi-national analysis of 48 countries," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 11(3), pages 541-552, June.
    5. Olivia S. Mitchell, 1998. "Administrative Costs in Public and Private Retirement Systems," NBER Chapters, in: Privatizing Social Security, pages 403-456, National Bureau of Economic Research, Inc.
    6. Mitchell, Olivia S., 1993. "Publicpension governance and performance : lessons for developing countries," Policy Research Working Paper Series 1199, The World Bank.

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