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New Models for Old-Age Security: Experiments, Evidence, and Unanswered Questions

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  • James, Estelle

Abstract

The escalating costs of traditional social security systems are forcing countries to reevaluate the formal programs that provide income maintenance support to the aging. This article suggests a reform strategy built around three systems, or "pillars," to provide old-age security-a public pillar with mandatory participation, a private, mandatory savings plan, and a voluntary savings system. Three variations of this model are being implemented in different countries: the Latin American model, in which individual workers choose an investment manager for their retirement funds; the OECD model, in which employers, union trustees, or both choose the investment manager for an entire company or occupation; and the Swedish notional account model, in which there are no funds to invest. Preliminary empirical evidence on the efficiency and growth effects of pension reform, mostly from Chile, indicates that the impact on national saving and financial market development and, through these, economic growth, has been positive and possibly large.

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  • James, Estelle, 1998. "New Models for Old-Age Security: Experiments, Evidence, and Unanswered Questions," The World Bank Research Observer, World Bank, vol. 13(2), pages 271-301, August.
    • Handle: RePEc:oup:wbrobs:v:13:y:1998:i:2:p:271-301
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    References listed on IDEAS

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    Cited by:

    1. Rashid Amjad & Musleh ud Din, 2010. "Economic and Social Impact of Global Financial Crisis: Implications for Macroeconomic and Development Policies in South Asia," PIDE Monograph Series 2010:1, Pakistan Institute of Development Economics.
    2. Esteban Calvo, 2014. "Comparative-historical Analysis of Aging Policy Reforms in Argentina, Chile, Costa Rica, and Mexico," Working Papers 61, Facultad de Economía y Empresa, Universidad Diego Portales.
    3. Gora, Marek & Rutkowski, Michal, 1998. "The quest for pension reform : Poland's security through diversity," Social Protection Discussion Papers and Notes 20111, The World Bank.
    4. Gupta Ramesh, 2002. "Pension Reforms in India: Myth, Reality and Policy Choices," IIMA Working Papers WP2002-09-03, Indian Institute of Management Ahmedabad, Research and Publication Department.
    5. repec:pid:wpaper:2010:1 is not listed on IDEAS
    6. F.L. MacKellar & T.Y. Ermolieva, 1999. "The IIASA Social Security Reform Project Multiregional Economic-Demographic Growth Model: Policy Background and Algebraic Structure," Working Papers ir99007, International Institute for Applied Systems Analysis.
    7. Katja Funke & Georg Stadtmann, 2004. "Operations of a Pension Fund after the Asian Crisis: The Thai Experience," Asian Economic Journal, East Asian Economic Association, vol. 18(4), pages 439-470, December.
    8. F.L. MacKellar & T.Y. Ermolieva & H. Reisen, 1999. "Globalization, Social Security, and International Transfers," Working Papers ir99056, International Institute for Applied Systems Analysis.
    9. A. Westlund & T.Y. Ermolieva & F.L. MacKellar, 1999. "Analysis and Forecasting of Social Security: A Study of Robustness," Working Papers ir99004, International Institute for Applied Systems Analysis.
    10. Rabindra Nath Chakraborty, 1999. "Finanzkrise und der Aufbau der Alterssicherung: Das Beispiel Thailand," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 68(1), pages 36-50.

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