Pension Reform and Gender Gaps in Latin America: What are the Policy Options?

Abstract

Several Latin American countries have implemented structural reforms in their social security-pension systems. These reforms have modified the traditional public pay-as-you-go defined benefit (PAYG-DB) schemes, introducing multipillar systems where fully funded defined contribution (FF-DC) schemes play an important role. Gender gaps in coverage and benefits under PAGY-DB and FF-DC schemes have been one of the policy issues missing in most of the reforms, in part because it has been certainly underresearched in the literature. This paper studies the sources of pension gender gaps and provides the pros and cons of a set of policy options that may contribute to overcoming the gaps found in both schemes. These policies are divided on the one hand, into specific policies that directly affect the determination of pension benefits by modifying formula design or eligibility conditions and, on the other hand, policies that indirectly affect the level of benefits and the likelihood of being entitled to them by changing incentives in labor market conditions.