Pension Reform, Financial Market Development, and Economic Growth : Preliminary Evidence From Chile

Author/Editor:

Robert Holzmann

Publication Date:

August 1, 1996

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The Chilean pension reform of 1981, in which Chile moved from an unfunded to a funded scheme, is considered to have contributed to this country’s excellent economic performance since the mid-1980s. The paper highlights the theoretical underpinnings of the claimed economic effects and presents empirical data and preliminary econometric testing of the conjectured growth, capital formation, and saving effects. The empirical evidence is consistent with most of the claims. In particular, the direct impact of financial market development on private saving is found to be negative, which underscores the importance of sound fiscal policy and public saving to support the transition.

Series:

Working Paper No. 96/94

Subject:

Notes:

Also published in Staff Papers, Vol. 44, No. 2, June 1997.

English

Publication Date:

August 1, 1996

ISBN/ISSN:

9781451950755/1018-5941

Stock No:

WPIEA0941996

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

52

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