Chile 2008 Pension Reform: Preparation for New Analysis

Abstract: 
This TRIO will lay the groundwork for a NIA competitive renewal application in 2010 that will be directed towards evaluating the medium‐ and longer‐run impacts of important dimensions of the 2008 Chilean Pension Reform. These changes were not anticipated or covered by the current grant when it was developed in 2003‐4. In particular, the proposed TRIO project will: (1) Characterize the relevant details and time lines of the multiple components of the 2008 Reform. (2) Conduct comparative short‐run analysis for the Preliminary Analsyis section of the new application, using the 2006 and 2009 EPS before and after the initiation of some components of the Reform, of behaviors such as formal pension contribution system participation and financial literacy, with particular attention to groups that have traditionally had low participation (e.g, women, youth, rural residents). (3) Develop initial dynamic structural models to analyze the medium‐ and longer‐run impacts of the 2008 Reform to be presented in the Methodology Section of the new application. These models will permit assessing how changes to the pension system, of the kind introduced by the reforms, affect work, pension contribution, investments and retirement behavior. The TRIO analysis is expected to increase significantly the prospects for a successful competitive renewal application through developing a better research strategy for understanding the latest significant changes in the Chilean pension system which, as noted above, has been and continues to be a model for other countries.
Funded By: 
Boettner
Award Dates: 
July 1, 2009 - June 30, 2010
PARC Grant Year: 
Year 16