The Impacts of Pension Privatization in Latin American: A Cross-Country Comparison of Pension Reforms and the Introduction of Individual Accounts. An analysis modeled after the six guiding core principles of Social Security
Date of Submission
Academic Programs and Concentrations
Project Advisor 1
L. Randall Wray
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. 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.
 Mesa-Lago, Reassembling Social Security: A Survey of Pensions and Health Care Reforms in Latin America, 2008
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Le Fraga, Victoria, "The Impacts of Pension Privatization in Latin American: A Cross-Country Comparison of Pension Reforms and the Introduction of Individual Accounts. An analysis modeled after the six guiding core principles of Social Security" (2017). Senior Projects Fall 2017. 34.