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Chile's pension reform after twenty years

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  • Acuna R., Rodrigo
  • Iglesias P., Augusto

Abstract

The aim of this paper is to describe the 1980 Chilean pension reform and to present its main results and economic impact. It is mainly descriptive; however we have tried to emphasize the lessons that may be learned and that may be of interest to other countries in different circumstances. In particular, we focus on potential areas for regulatory improvements. In Section II, a brief description of the AFP system and its place within Chile's social security system is presented. Also, the main characteristics of the transition from the"old"to the new system are sketched, together with the main changes in regulation after 1980. Section III includes a history of pension reform in Chile along with an analysis of the circumstances which may explain why the country decided to introduce such a radical reform. In Section IV, the performance of the AFP system is summarized. In Section V, the main economic effects of pension reform are discussed. Section VI presents our view regarding future development in the regulation of the AFP system. The paper concludes with some comments on the timing of possible regulatory changes.

Suggested Citation

  • Acuna R., Rodrigo & Iglesias P., Augusto, 2001. "Chile's pension reform after twenty years," Social Protection Discussion Papers and Notes 24079, The World Bank.
    • Handle: RePEc:wbk:hdnspu:24079
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    References listed on IDEAS

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    1. Eduardo Walker & Fernando Lefort, 2002. "Pension Reform And Capital Markets: Are There Any (Hard) Links?," Abante, Escuela de Administracion. Pontificia Universidad Católica de Chile., vol. 5(2), pages 77-149.
    2. Palacios, Robert & Whitehouse, Edward, 1998. "The Role of Choice in the Transition to a Funded Pension System," MPRA Paper 14176, University Library of Munich, Germany.
    3. Catalan, Mario & Impavido, Gregorio & Musalem, Alberto R., 2000. "Contractual savings or stock market development - Which leads?," Policy Research Working Paper Series 2421, The World Bank.
    4. Corsetti, Giancarlo & Schmidt-Hebbel, Klaus, 1995. "Pension reform and growth," Policy Research Working Paper Series 1471, The World Bank.
    5. Morande, Felipe G., 1998. "Savings in Chile. What went right?," Journal of Development Economics, Elsevier, vol. 57(1), pages 201-228, October.
    6. Oscar Godoy & Salvador Valdés, 1994. "Democracia y Previsión en Chile: Experiencia con Dos Sistemas," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 31(93), pages 135-160.
    7. Walker, Eduardo*Lefort, Fernando, 2002. "Pension reform and capital markets : are there any (hard) links?," Policy Research Working Paper Series 24082, The World Bank.
    8. Felipe Morandé, 1996. "Savings in Chile: What Went Right?," IDB Publications (Working Papers) 5922, Inter-American Development Bank.
    9. Robert Holzmann, 1997. "Pension Reform, Financial Market Development, and Economic Growth: Preliminary Evidence from Chile," IMF Staff Papers, Palgrave Macmillan, vol. 44(2), pages 149-178, June.
    10. Dominique Hachette, 1998. "Ahorro Privado en Chile," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 35(104), pages 3-48.
    11. Palacios, Robert & Rofman, Rafael, 2001. "Annuity markets and benefit design in multi-pillar pension schemes : experience and lessons from four Latin American countries," Social Protection Discussion Papers and Notes 23159, The World Bank.
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