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Pooling, savings, and prevention - mitigating the risk of old age poverty in Chile

Author

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  • Packard, Truman G.

Abstract

Using data collected in a survey on risk, and social insurance in Chile, the author funds that workers who entered the labor market after the pension reform of 1981, have a greater"contribution density"than those who contributed to the previous social security system. Further, the expectation of care from children, and the amount spent on their education, significantly lowers the likelihood of contribution to the pension system. Workers who have met the contributory requirements to qualify for the minimum pension guaranteed by the government, are significantly less likely to continue making contributions. The likelihood of contributions beyond the eligibility threshold being lowered further, the greater the market rental value of respondents'homes. Furthermore, individuals with a greater tolerance for risk contribute, suggesting that there are retirement security investments in Chile, that are perceived as relatively less risky than saving in the reformed pension system. The results indicate that housing could beone such investment.

Suggested Citation

  • Packard, Truman G., 2002. "Pooling, savings, and prevention - mitigating the risk of old age poverty in Chile," Policy Research Working Paper Series 2849, The World Bank.
    • Handle: RePEc:wbk:wbrwps:2849
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    Citations

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    Cited by:

    1. Abigail Barr & Truman G. Packard, 2005. "Seeking solutions to Vulnerability in Old Age: Preferences, constraints, and alternatives for coverage under Peru’s pension system," CSAE Working Paper Series 2005-05, Centre for the Study of African Economies, University of Oxford.
    2. World Bank, 2006. "Making the New Indonesia Work for the Poor," World Bank Publications - Reports 8172, The World Bank Group.
    3. Jean-Pierre Cling & Stéphane Lagrée & Mireille Razafindrakoto & François Roubaud, 2012. "L'économie informelle dans les pays en développement," Post-Print hal-01664167, HAL.
    4. Calvo, Esteban & Williamson, John B., 2006. "Old-Age Pension Reform and Modernization Pathways: Lessons for China from Latin America," MPRA Paper 4872, University Library of Munich, Germany, revised 2007.
    5. Maloney, William F., 2004. "Informality Revisited," World Development, Elsevier, vol. 32(7), pages 1159-1178, July.
    6. Wei‐Ting Yen, 2022. "Shaky social insurance foundation: Income instability and pension participation in South Korea," Social Science Quarterly, Southwestern Social Science Association, vol. 103(3), pages 494-508, May.
    7. Paulette Castel & Trung-Thanh To, 2012. "Informal employment in the formal sector: wages and social security tax evasion in Vietnam," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 17(4), pages 616-631.

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