Abstract
Since the 1980s, over 30 countries have implemented various kinds of personal social security accounts. Most counties have adopted them as a part of their social security systems, to also continue to fund their public pay-as-you-go system. This paper analyzes the effects of adopting private accounts, as well as the percentage of income paid into private accounts, on GDP per capita growth. Global panel-data regressions over time are used, as well as sample splits for developing countries and Latin America, where many countries adopted some form of private account following Chile’s ground-breaking example of a complete switch from public to private social security system. The paper estimates statistically significant effects of privatizing parts or all of social security on countries’ GDP per capita growth. They also benefit stock market growth and enrollment rates in secondary and higher education, as well as in reducing government expenditures and national debt.
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