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Implicit redistribution within Argentina’s social security system: a micro-simulation exercise

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  • Pedro Moncarz

Abstract

The intra-generational redistribution in the Argentinean pension program is assessed in a lifetime basis. Using household surveys, the lifetime flows of labor income, contributions and retirement benefits are simulated. Then, the expected present values of pre- and post-social security labor income are computed. The results show that the pay-as-you-go defined-benefit system appears to be regressive, especially for women in the private sector. The results are robust to the use of alternative discount rates and different definitions of pre- and post-social security wealth. When income from informal jobs is taken into account, the system becomes slightly progressive. A weak enforcement of the law makes the system less regressive. Finally, in a counterfactual scenario in which there is no informal labor, the system becomes almost neutral, even showing a small level of progressivity. Copyright The Author(s) 2015

Suggested Citation

  • Pedro Moncarz, 2015. "Implicit redistribution within Argentina’s social security system: a micro-simulation exercise," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 24(1), pages 1-35, December.
    • Handle: RePEc:spr:laecrv:v:24:y:2015:i:1:p:1-35:10.1007/s40503-015-0016-8
    DOI: 10.1007/s40503-015-0016-8
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    Cited by:

    1. Ariel Barraud, 2019. "Ahorro previsional voluntario en Argentina. Alternativas para su incentivo y primera caracterización frente a la nueva legislación tributaria," Asociación Argentina de Economía Política: Working Papers 4109, Asociación Argentina de Economía Política.

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    More about this item

    Keywords

    Social security; Redistribution; Micro-simulations; Argentina; H50; H55;
    All these keywords.

    JEL classification:

    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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