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

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...

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Bibliographic Details
Main Author:	Packard, Truman G.
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, D.C. 2013
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 http://hdl.handle.net/10986/14793

Description
Summary:	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.

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