Pension reform in Chile

Formal labour market and pension wealth: evaluating the 2008 Chilean pension reform

May 25, 2011

Speaker: Prof Orazio Attanasio, University College of London

Prof Orazio Attanasio from the University College of London presents this study, which aims to estimate the impact of the 2008 Chilean pension reform on the Chilean labor market participation. During 2008, Chile reformed its Defined Contribution Pension System, widening the welfare tier and improving the contributory tier. The main goals of the reform were to guarantee a minimum level of consumption upon retirement, prevent old-age poverty and reduce gender inequalities. The reform ensures old-age income to individuals that have not saved enough to self-finance a minimum level of consumption and promotes labor market participation, in particular among groups whose attachment has been traditionally infrequent or irregular, such as women, the self-employed and young people.

The study uses a difference in difference estimator to address the effect of the expected pension wealth on the formal labor market participation. It exploits the differential effects of the reform on individuals belonging to several year-of-birth cohorts and different groups to gain identification.

View Prof Attanasio's  presentation (978.4 KB)

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