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How Do We Measure the Impact of Social Security Systems and Reforms?

How Do We Measure the Impact of Social Security Systems and Reforms?

Chapter:
(p.32) Chapter Three How Do We Measure the Impact of Social Security Systems and Reforms?
Source:
The Gender Impact of Social Security Reform
Author(s):
Estelle JamesAlejandra Cox EdwardsRebeca Wong
Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226392028.003.0004

This chapter discusses the methodology used in this study. Detailed simulations of the old and new systems in Chile, Argentina, and Mexico were carried out to investigate more precisely the impact of pension design and reform on men and women. The old systems in all three countries were pay-as-you-go, defined benefit schemes that paid a benefit to workers based on their years of work and average wage during the last few years. Projected revenues were far less than expenditures in these systems, so they had to be changed. In addition, inequities, negative impacts on the broader economies, and distrust of politically motivated schemes led to a major institutional reform. The loose connection between benefits and contributions in the old systems favored women in some ways but hurt them in others. Critics claimed that the closer connection in the new systems would disadvantage women because of their lower contribution histories. But this argument overlooks important features of these systems, such as the public benefit and the joint pension requirement. The net impact of the change is ultimately an empirical issue, which is analyzed in this book.

Keywords:   Chile, Argentina, Mexico, pension design, pension reform, defined benefit plans, pay-as-you-go plans, contributions, women, public benefit

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