Date of Submission

Fall 2017

Academic Programs and Concentrations


Project Advisor 1

L. Randall Wray

Abstract/Artist's Statement

Latin America was the world’s pioneering nation in the privatization of pensions. In 1981, Chile’s pension system underwent a reform making it the first country to replace a public defined-benefit pay-as-you-go pension scheme with a fully funded defined-contribution pension scheme based on individual accounts. This project assesses the impacts and results of pension privatization in Chile, Mexico and Uruguay. As indicators of a prosperous system, my analyses are made using the six core guiding principles of Social Security: i) Coverage; ii) Equal Treatment and Social Solidarity; iii) Gender Equity; iv) Adequacy of Benefits; v) Administrative Costs; vi) and, Financial Sustainability[1]. This project uses historical data from the three countries, including periods before the reform, in order to adequately compare the two systems and determine which has proven to be more efficient. The main findings of this paper are the positive impacts associated with pensions privatization with respect to the six core guiding principles of Social Security.

[1] Mesa-Lago, Reassembling Social Security: A Survey of Pensions and Health Care Reforms in Latin America, 2008

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