Abstract
This paper contains information about workers´ participation in the pension schemes in four Latin American countries which carried out structural pension reforms in 1990’s. It surveys some interesting hypotheses about the main causes that discourage participation in the new pension scheme. The main finding is that the present participation structure is strongly influenced by labor market characteristics like low-productivity and informal jobs.
Highlights
In Latin America, country Governments failed to ensure universal access to pensions
A new era of reforms came to light in early 1990 ́s and almost all Latin American Government established a new private pension pillar that was thought to be more attractive for all workers
The long term fiscal sustainability of the public pension schemes was severely questioned in Latin America during 1990’s
Summary
In Latin America, country Governments failed to ensure universal access to pensions. After more than four decades of pension systems in Latin America the prereform situation in 1980 ́s were a dispersed, poor managed, unfair and strongly Bismarckian public pension schemes. Pension reforms of 1990’s in Latin America were characterized by one important structural change: the creation of a new private pillar of contribution; in simple words, a private pension system. This new private scheme in some cases substituted completely the old public paygo regime or complemented it through a multi-pillar system. In the words of Mesa-Lago (2005): “structural reforms are those that replace on the whole or in part the public system with a private one” He divided these structural pension reforms into three types: 1) The substitutive reform: The old paygo public system is substituted completely by the fully funded privately managed scheme.
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