Pooling, Savings, and Prevention: Mitigating the Risk of Old Age Poverty in Chile

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 be one such investment.

Bibliographic Details

Main Author:	Packard, Truman G.
Language:	English en_US
Published:	World Bank, Washington, D.C. 2002-05
Subjects:	OLD AGE ASSISTANCE, SOCIAL INSURANCE PROGRAMS, LABOR MARKET NEXUS, PENSION REFORM, SOCIAL SECURITY SYSTEMS, SAVINGS BEHAVIOR, CONTRIBUTIONS, ELIGIBLE BENEFICIARIES, RISK AVERSION, RETIREMENT INCOME ACCIDENT INSURANCE, ACCOUNTING, ADVERSE SELECTION, AFFILIATE, AFFILIATES, AGENTS, ANNUITIES, ANNUITY, ASYMMETRIC INFORMATION, BANK ACCOUNTS, COMMISSIONS, COVERAGE, DEPOSIT INSURANCE, DEPOSITS, DEVELOPED COUNTRIES, ECONOMICS, EMPIRICAL ANALYSIS, EMPLOYMENT, FINANCIAL REGULATION, GOVERNMENT INTERVENTION, HEALTH CARE, HEALTH INSURANCE, HOUSEHOLD INCOME, HOUSING, HUMAN DEVELOPMENT, IMPROVEMENTS IN HEALTH, INCENTIVES TO SAVE, INCOME, INCOME DISTRIBUTION, INCOME GROUPS, INDIVIDUAL ACCOUNTS, INFLATION, INFORMATION ASYMMETRIES, INFORMATION PROBLEMS, INSURANCE, INSURANCE COMPANIES, INSURANCE MARKETS, INSURANCE POLICIES, INSURANCE POOLS, INSURANCE SYSTEM, LABOR FORCE, LEGISLATION, LIFE EXPECTANCY, LIFE INSURANCE, LOW INCOME, MANDATES, MARKET FAILURES, MITIGATION, MORAL HAZARD, MORTALITY, OLD AGE, PENSION FUNDS, POLICY RESEARCH, POLITICAL SUPPORT, POOR, PRIVATE INSURANCE, PRIVATE SECTOR, PUBLIC HEALTH, PUBLIC UNEMPLOYMENT, RATES, RECIPROCITY, RETIREMENT, RETIREMENT PENSIONS, SAVINGS, SECURITIES, SELF INSURANCE, SELF PROTECTION, SOCIAL ASSISTANCE, SOCIAL INSURANCE, SOCIAL SECURITY, STRUCTURAL REFORMS, SURVIVOR BENEFITS, TAXATION, UNEMPLOYMENT, UNEMPLOYMENT INSURANCE,
Online Access:	http://documents.worldbank.org/curated/en/2002/05/1801619/pooling-savings-prevention-mitigating-risk-old-age-poverty-chile https://hdl.handle.net/10986/14793
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