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Assessing Chile’s pension system: challenges and reform options

Evans, Christopher and Pienknagura, Samuel (2024) Assessing Chile’s pension system: challenges and reform options. Economía, 23 (1). 50 – 73. ISSN 1529-7470

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Identification Number: 10.31389/eco.420


This paper takes stock of Chile’s defined contribution pension system and assesses reform options aimed at increasing replacement rates. An international comparison shows that, despite being quite influential when established, it is now delivering low replacement rates relative to OECD peers, as its parameters did not adapt over time to changing demographics, declining global returns, higher-than-expected informality in the labor market, and, more recently, to legislation allowing for pension savings withdrawals to counter the effects from the COVID-19 pandemic. We find that a reform that raises contribution rates and the retirement age would significantly improve replacement rates and lower fiscal costs associated with the system, especially if accompanied by complementary policies to boost workers’ contribution density.

Item Type: Article
Official URL:
Additional Information: © 2024 The Author(s)
Divisions: LSE
Subjects: H Social Sciences > HJ Public Finance
H Social Sciences > HC Economic History and Conditions
JEL classification: D - Microeconomics > D1 - Household Behavior and Family Economics > D14 - Personal Finance
H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents > H30 - General
H - Public Economics > H5 - National Government Expenditures and Related Policies > H55 - Social Security and Public Pensions
Date Deposited: 28 Mar 2024 15:24
Last Modified: 16 May 2024 04:22

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