Chile's Solidarity Pillar: A Benchmark for Adjoining Zero Pillar with DC Schemes

Author(s)
Fajnzylber, Eduardo
Date Issued
July 24, 2019
Subjects
Pensioni
Previdenza
Abstract
In 2008, Chile introduced a New Solidarity Pillar (NSP) designed to eliminate the incidence of poverty among elderly adults by setting a floor at around 40 percent of the minimum monthly income for the poorest 60 percent of the population. This paper describes the NSP’s main characteristics and the main results achieved during its first seven years of operations: coverage, fiscal cost, poverty reduction, and the system’s role in reducing the significant gender gap in pensions. Its effects on incentives to contribute are discussed, as well as the literature that has attempted to measure these effects. Finally, the main challenges facing the NSP and the implications for other countries under defined contribution pension schemes are summarized.
Citation
Fajnzylber E. (2019), Chile's Solidarity Pillar: A Benchmark for Adjoining Zero Pillar with DC Schemes, Roma, INAPP, WP, n. 21 <https://oa.inapp.org/handle/20.500.12916/457>
URI
Type
Working Paper
File(s)
Thumbnail Image
Name

Inapp_Fajnzylber_Chile'sSolidarity_WP21_2019.pdf

Description
Main document
Size

1.57 MB

Format

Adobe PDF

Checksum (MD5)

393b47cd011043bdcfe20d236a04fb4e

Thumbnail Image
Name

Inapp_Fajnzylber_Chile'sSolidarity_WP21_2019.jpg

Description
Cover
Size

332.58 KB

Format

JPEG

Checksum (MD5)

9a0f74083c53dfbfb52107afe6e145f0