The myth of economic incentives around the debate on the design of optimal pension systems: A survival analysis for the Argentine case

Abstract

AbstractFrom a panel of administrative data of contributors to the Argentine pension system, a survival analysis was carried out to compare the time in months until contributor status is lost for individuals who reach the minimum retirement age. The analysis involves two periods: one where the fully funded scheme was in force and the other with the pure pay‐as‐you‐go scheme in effect. It is observed that the survival curve of the contributor status during the second period is always above that in the first one, indicating that the probability of maintaining this status was always higher during the second period. Likewise, it was found that belonging to the cohort/group of the first period is significant in explaining the risk of losing contributor status, even controlling for other relevant variables. This result contrasts with the predictions of the World Bank about the best incentives that the fully funded scheme would generate for the supply of formal labor.Related ArticlesAngelaki, Marina, and Leandro N. Carrera. 2015. “Radical Pension Reforms after the Crisis: A Comparative Analysis of Argentina and Greece.” Politics & Policy 43(3): 378–400. https://doi.org/10.1111/polp.12117.Hazakis, Konstantinos J. 2015. “The Political Economy of Economic Adjustment Programs in the Eurozone: A Detailed Policy Analysis.” Politics & Policy 43(6): 822–54. https://doi.org/10.1111/polp.12141.Jakee, Keith, and Keith Stacy. 2021. “Revisiting Pension Reform in Sweden: The Role of Corporatism (and Why it Matters).” Politics & Policy 49(3): 651–81. https://doi.org/10.1111/polp.12405.