## 12. A Comparison of the NPV of Social Security Public Liabilities of Colombia and the United States

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### I. Introduction — scope and aggregate magnitudes
- Historical framing: three stages of social security development (Germany 1883; expansion across Europe and the United States 1901–28 and New Deal 1935–36; outsourcing/off-shoring 1980s–1990s increasing labor informality).
- Colombia: Pay-as-You-Go (Paygo) pensions established 1967 (ISS); Law 100 of 1993 created a dual public-private competitive system and aimed for universal health coverage via cross subsidies.
- Aggregate fiscal magnitudes (2007–50):
  - NPV of public pension debt: around 160 percent of GDP.
  - NPV of health system debt: about 97 percent of GDP.
- Chapter focus: parametric pension reforms (retirement age, replacement rates), health system reforms (coverage, fiscal gap), official pension simulations and author’s health simulations to compute NPV of social security debt.

### II. Pension reforms and fiscal implications

- Retirement age: historical and projected
  - Pre-1993 retirement ages:
    - Public sector (Law 33 of 1985): 50/55 (female/male) after 20 years.
    - Private sector: 55/60 (female/male).
  - Life expectancy context: 66 at birth or 70 when computed at the age of retirement.
  - Retirement Age Gap (RAG) metrics:
    - RAG-Gross = Life expectancy at birth − official retirement age.
    - RAG-Net = Life expectancy at retirement age − official retirement age.
  - Empirical RAG-Net trajectories:
    - Females: began at 29 years (mid-1980s) → declined to 26 as retirement age rose from 50 to 57; retirement age + life expectancy at retirement rose from 79 to 84 over four decades.
    - Males: began at 21 years → declined to 19 as retirement age rose from 55 to 60; later retirement fixed at 62; retirement age + life expectancy at retirement rose from 76 to 82.
  - Projections & policy:
    - Without near-term increases to 60/65 (female/male), RAG-Net projected to expand to 29/21 (female/male) by 2015.
    - Indexing retirement age to life expectancy to keep RAG-Net constant implies retirement ages of 64/67 (female/male) for Colombia.
    - U.S. benchmark envisaged at 69 in coming decades.
  - Institutional constraints:
    - Constitutional Court ruled unlawful article 4 of Law 860 of 2003 (bringing forward retirement age increase to 2008) citing “acquired rights”.
    - Constitutional amendments required for key pension parameter changes; transitional pension period extended 1993–2014.

- Replacement rates: history, projections, and AFP effects
  - Definition: replacement rate = ratio of pension to wage earnings upon which contributions were made.
  - Example equilibrium: contributions ≈ 10 percent of payroll over 30 years → replacement ≈ 60 percent over 20 years of pension benefits if real compound yield = 6 percent per annum.
  - Historical Colombian replacement rates: 75–90 percent during 1980s–early 1990s; some public cases reached 100 percent.
  - Benchmarks:
    - OECD average replacement rates ≈ 68 percent with contributions 10–15 percent.
    - U.S. mode under paygo ≈ 45 percent.
  - Fiscal consequences: paygo moved from surplus (≈ 1–2 percent of GDP in 1970s–1980s) to deficit mid-2000s; central government incremental tax support rose from 2 percent of GDP in 1998 to 4.6 percent of GDP in 2008.
  - Reforms under Law 100 (1993) and Law 797 (2003):
    - Years of service increased from minimum 10 to up to 20.
    - Contribution rates increased from 6–8 percent to 10–12 percent.
    - 2005 constitutional amendment ended extra-payment “Mesada 14” for newcomers retiring after 2005.
  - Expected replacement rates for new pensioners starting 2014: range of 65–70 percent (assumptions: contribution density ≈ 50 percent of labor time; low wage contributions below 2 minimum legal wages for nearly 70 percent of contributors).
  - Private AFP system:
    - Average AFP portfolio real returns 1995–2007 ≈ 10 percent per-year.
    - Full-density 30-year contributor could obtain replacement ≈ 60 percent under AFPs (≈ ten percentage points below expected paygo replacement under new rules).
    - High informality reducing contribution years to 20–25 and real returns converging to 6 percent could yield AFP replacement rates ≈ 40–50 percent.
    - Distribution: ≈ 70 percent of contributors with AFPs; ≈ 30 percent remain with paygo.
  - Policy measures and effects:
    - Decree 2765 of 2007: FOGAFIN resources to avoid cumulative negative real returns on AFP accounts at retirement.
    - Law 797 of 2003 limited switching between regimes to 10 years before retirement.
    - Decree-Law 1299 of 1994 allowed exit bond up to 20 minimum wages; Constitutional Court reduced to 10 minimum wages for moves after 2006 (C-734 of 2005; T-147 of 2006), potentially reducing replacement rates by about 20 percentage points for movers.
    - 2007–08 financial crisis: AFP assets averaged -2 percent real returns over the last 36 months period described.
    - Proposed multifunds/generational portfolios (Chile 2002, Mexico 2005, Peru 2005) could improve long-term returns.

- Coverage, labor informality, and payroll tax reform options
  - Coverage level: pension system coverage ≈ 25–27 percent of active labor force.
  - Payroll tax effects: Kugler and Kugler (2008) estimate a 10 percent increase in payroll taxes reduces formal employment by 4–5 percent in Colombia.
  - Reallocation proposal to reduce firm payroll burden:
    - Substitute “pure tax” payroll components with VAT increase from 16 percent to 17 percent.
    - Redirect ICBF (3 percent) and Sena (2 percent) social expenditures through general budget.
    - Dismantle Co-Familiares quasi-fiscal subsidy (4 percent of payrolls) using their assets.
    - Potential combined reduction on firm payrolls: 9 percentage points.
  - Contribution sharing international comparison:
    - Firms in Colombia absorb 66–75 percent of social security costs.
    - Chile: worker pays entire 13.5 percent of payroll; 10.5 percentage points (78 percent) go into account; 3 percentage points cover insurance/administration.
  - Colombian contribution structure:
    - Low-wage workers (up to 4 minimum wages) contribute 16.5 percent; firm pays 75 percent; 11.5 percentage points (72 percent) enter private account.
    - For high-wage workers, share into private account falls from 72 to 64 percent.
  - Double misalignment:
    - Firms face high labor-related costs plus quasi-fiscal payments.
    - Workers receive only 64–72 percent of payments into personal accounts (vs. 78 percent in Chile).
  - Recommendation:
    - Target contributions into workers’ accounts of 15–20 percent with even sharing between workers and firms.
    - Payroll taxes should not finance redistributive social assistance programs; these should be financed from general tax revenues.

- Fiscal impact and NPV of pension liabilities
  - Transition issues:
    - Cash reserves exhausted earlier than anticipated after migration of younger cohorts to AFPs; public system used general taxes to pay benefits as early as 2004.
    - Central government allocated nearly 5 percent of GDP (about a third of total tax revenues) to cover pension benefits.
    - Pensioners ≈ 1 million retirees (6 percent of total population of 43 million).
  - Contingent liabilities include legal claims for higher pensions and longer life expectancies under fixed retirement age.
  - Demographics: by 2050 percentage of population over 60 projected to triple to 18 percent.
  - Historical reserves: ISS reserves peaked at 2 percent of GDP in 1996 and were exhausted by 2004.
  - Long-term central government deficit from pension pressures estimated ≈ 2–3 percent of GDP.
  - Mitigations: 0.2 percent of GDP retained for territorial pension liabilities (FONPET); capitalizations/privatizations to fund some sector liabilities.
  - Official figures: pension expenditure (cash basis) rose over 2000–08 to 4.6 percent of GDP in 2008 (ratios based on DANE estimates before 2008 historical revision).

- Quantified NPV comparisons and attribution of reforms
  - Projected cash payments to support Paygo reach 5.2 percent of GDP by 2010.
  - AFP asset accumulation:
    - Portfolios rose from nearly 2 percent of GDP in 1995 to 17 percent of GDP by end-2008.
    - Obligatory savings: 14 percent of GDP.
    - Voluntary savings: 2 percent of GDP.
    - Unemployment insurance-payments (cesantias): 1 percent of GDP.
  - Official NPV estimates (2007–50):
    - NPV of pension liabilities under new rules: nearly 160 percent of 2007 GDP.
    - NPV under no reform (pre-1993): 260 percent of GDP.
    - Reduction in NPV due to reforms: about 100 percent of GDP.
    - Attribution of the 100 percent GDP reduction:
      - ≈ 40 percent of GDP reduction attributed to Law 100 of 1993.
      - ≈ 60 percent of GDP reduction attributable to Laws 797 and 860 of 2003 and the 2005 Constitutional reform.
      - If Art. 4 of Law 860 had been allowed to bring forward new parameters, an additional 16 percent of GDP could have been saved.

### III. Health reforms, coverage expansion, and fiscal projections

- Law 100 of 1993: structure and financing
  - Objective: achieve universal health care coverage. Early 1990s coverage = 28 percent.
  - Law 100 introduced unified insurance based on cross subsidies:
    - Contributive System (CS): contributions = 12.5 percent of payrolls; employer 67 percent; employee 33 percent.
    - Subsidized System (SS): for those lacking means to pay contributions.
  - Institutions:
    - EPS (Empresas Promotoras de Salud) offering POS.
    - IPS (Instituciones Prestadoras de Salud) as service providers; EPS permitted to create IPS (vertical integration).
  - FOSYGA (Fondo de Solidaridad y Garantía) reallocates payroll contributions to EPS via UPC; remaining funds support SS and shortfalls covered by central government.
  - POS harmonization mandated by Constitutional Court (T-760 of 2008); Law 1122 of 2007 imposed a 30 percent limit on new services contracted through integrated EPS-IPS.

- Coverage and financing outcomes
  - Coverage expansion (early 1990s → end-2006):
    - From 28 percent → 86 percent coverage.
    - SS: 4.8 million (12.4 percent) → nearly 20 million (46 percent).
    - CS: 5 million (13 percent) → almost 17 million (40 percent).
    - Special programs add 2 percent; total ≈ 88 percent.
  - Financing imbalance:
    - Expected CS/SS financing split: two-thirds / one-third.
    - Actual 2006 split: CS ≈ 55 percent; SS ≈ 45 percent.
    - Contributors/employed in health increased from 30 percent → 37 percent during 2002–07.
    - Contributors to pensions remained ≈ 27 percent.
    - Persisting informality expected to aggravate CS/SS imbalance.
  - Health care spending levels:
    - 2003 spending ≈ 7.7 percent of GDP (average 1998–2002 ≈ 8.5 percent).
    - Barón (2007): spending rose from 6.2 percent → 7.7 percent of GDP between 1993 and 2003 due mainly to coverage expansion.
    - Comparative: Colombia > Chile (5.9 percent) and Mexico (5.7 percent); corrected by GDP-per-capita, Colombia ≈ 36 percent above world average.

- Projection approach and baseline demographic assumptions
  - Drivers considered: population growth, income, labor participation, labor formality; epidemiological and technological factors excluded due to data constraints.
  - Projection steps:
    1. Stock 2006 situation and compute implicit fiscal imbalance.
    2. Project health accounts 2007–50; key variable = labor formality evolution driving CS contributions.
    3. Compute NPV of health-care public obligations.
  - Demographic baseline:
    - 2006 total population ≈ 43 million.
    - Population growth assumed to decelerate to ≈ 1 percent per-annum in 2020–50.
  - Table 1 population and coverage (Millions of people):
    - Total population: 43.2 (2006), 50.8 (2020), 68.5 (2050)
    - Working age population (78%): 33.8 (2006), 39.6 (2020), 53.4 (2050)
    - Employed population: 17.9 (2006), 21.0 (2020), 28.3 (2050)
    - Contributive system members: 20.1 (2006), 26.8 (2020), 34.3 (2050)
    - Subsidized system members: 17.0 (2006), 21.3 (2020), 32.6 (2050)
  - 2006 baseline metrics:
    - WAP/total population ≈ 78 percent.
    - employed/WAP = 53 percent.
    - open unemployment long-term average = 10.5 percent; crisis years 1998–2002: 14–16 percent; 2007–08 average = 11 percent.
    - workers actively contributing to health care as % of labor force = 37 percent.
    - Family density per contributor = 2.26 persons per contributor.
    - CS per-capita cost (UPC) 2006 = $408,000 (US$203 per beneficiary).
    - UPC full subsidy value = 4.4 percent of the annual LMW.

- Contributors by wage and other assumptions
  - Contributor wage groups:
    - High-wage: average 12 × LMW; 1 percent of contributors.
    - Medium-wage: average 6 × LMW; 12 percent.
    - Low-wage: average 2 × LMW; 87 percent.
  - Out-of-pocket supplementary health expenditures (percent of annual LMW, 2001 survey):
    - High-wage = 1.3 percent.
    - Medium-wage = 2.4 percent.
    - Low-wage = 1.6 percent.
  - Government capital contributions to public hospitals/state health enterprises ≈ $100,000 (US$50) per member attended through ISS.
  - Other FOSYGA accounts maintained at 0.4 percent of UPC.
  - Judicial costs: preliminary data suggest nine of ten lawsuits resolved in favor of the patient; FOSYGA reimburses EPS from national budget; technical health board under Law 1122 of 2007; Constitutional Court C-463 of 2008 orders EPS to implement board recommendations when seeking reimbursement.

- Baseline scenario and alternative scenarios modeled
  - Baseline assumptions:
    1. population growth 2006–10 = 1.18 percent per-year → 1 percent per-year over 2020–50;
    2. health coverage increases from 86 percent → 98 percent of population;
    3. contributors/employed increases from 40 percent → 50 percent.
  - Scenarios:
    - Status-quo labor formality: contributors/employed = 40 percent (constant).
    - Improved labor formality (baseline): contributors/employed increases 40 percent → 50 percent.
    - High labor formality improvement: contributors/employed increases 40 percent → 60 percent (2006–50), adding ≈ 2.5 million contributors relative to baseline.

- Health care fiscal projections (2006 base-year)
  - 2006 fiscal balances:
    - Health care sector deficit ≈ 2.1 percent of GDP.
    - CS+SS revenue/expenditure deficit ≈ 1.9 percent of GDP (CS small surplus; SS large deficit).
    - Private sector slight surplus = 0.1 percent of GDP.
    - Public sector deficit = 2.2 percent of GDP.
    - Public sector contributes on behalf of 1 million employees = 6 percent of all employed; regional employees 5 percent; central government employees 95 percent.
    - Central government fiscal deficit 2006 = 4.4 percent of GDP; consolidated fiscal deficit ≈ 1 percent of GDP.
  - Baseline projection (contributors/employed 40% → 50%):
    - public health care deficit rises from 2.1 percent of GDP (2006) → peak 4.3 percent of GDP in 2038.
    - deficit stabilizes in range 3.0–3.5 percent of GDP through 2050.
  - Three phases 2006–50:
    1. 2006–10 (expansion): deficit 2.1 → 2.8 percent of GDP; government adds 4.7 million SS affiliates (total 24.8 million) and 0.5 million to CS (total 17.8 million); contributors’ earnings contributions growth = 0.7 percent of GDP in 2006–10.
    2. 2010–35 (organic growth): deficit rises 2.8 → 3.8 percent of GDP; affiliated population grows 42.6 million (92 percent) → 56.7 million (96 percent); contributors/employed improves 40 percent → 47 percent.
    3. 2036–50 (stabilization/destabilization): deficit declines 3.8 → 2 percent of GDP as contributors/employed increases 47 percent → 50 percent.
  - Status-quo scenario (contributors/employed constant at 40 percent):
    - potential loss ≈ 3 million contributors relative to baseline.
    - health care fiscal deficit ≈ 3.8 percent of GDP by 2020 (≈ 0.5 percentage points of GDP higher than baseline); 6.8 percent of GDP by 2050 (≈ 4.9 percentage points of GDP above baseline).
  - High formality scenario (contributors/employed → 60 percent):
    - adds ≈ 2.5 million contributors relative to baseline.
    - CS share increases to 45–56 percent; SS decreases 55 → 44 percent.
    - deficit peaks ≈ 3.2 percent of GDP by 2024 (≈ 0.5 percentage points below baseline).
    - by 2034 deficit eases to 2.6 percent of GDP.
    - by 2050 system could reach a surplus ≈ 1.9 percent of GDP.

- NPV of health-care fiscal obligations (2006–50) — baseline results
  - Baseline NPV results (discounted over 2006–50):
    - Discount rate i = 4.0%:
      - Gross public spending = -107.0 (% GDP of 2007).
      - Net public duties (deficit) = -96.9 (% GDP).
      - Net private spending (surplus) = +35.5 (% GDP).
      - Total balance (public+private) = -61.4 (% GDP).
    - Discount rate i = 5.0%:
      - Gross public spending = -90.5 (% GDP).
      - Net public duties (deficit) = -80.1 (% GDP).
      - Net private spending (surplus) = +27.2 (% GDP).
      - Total balance (public+private) = -52.8 (% GDP).
  - Comparison with pensions:
    - NPV of pension obligations (2007–50) ≈ 160 percent of GDP.
    - Health obligations (baseline, discounted at 4 percent) ≈ 97 percent of GDP.
    - Pensions/health ratio in Colombia ≈ 1.7 (160 / 97).
  - International benchmarks:
    - U.S. Medicare contingent liability (excluding Medicaid) = 90 percent of GDP; including Medicaid = 259 percent of GDP.
    - NPV of U.S. pension obligations ≈ 117 percent of GDP.
    - Pension/health ratio in U.S.: ≈ 1.3 excluding Medicaid; 0.45 when including Medicaid.

### IV. Policy implications and conclusions
- Law 100 of 1993 increased public resource burden due to high labor informality and small CS contributor share.
- Universal coverage goal (assumed by 2011 in analysis) increases fiscal burden unless labor formality and contributor ratios improve.
- Labor market reforms increasing contributors/employed (formalization, payroll tax reductions, labor flexibility) materially improve fiscal outcomes for health and pensions.
- Under baseline labor formality improvements (contributors/employed 40% → 50%):
  - public health deficit peaks at 4.3 percent of GDP in 2038 and stabilizes at 3.0–3.5 percent of GDP through 2050.
  - NPV of health obligations ≈ 97 percent of GDP (discounted at 4 percent).
- If contributors/employed rises to 60 percent (high formality), health system could reach a surplus ≈ 1.9 percent of GDP by 2050.
- Pension challenges remain:
  - reforms cut pension NPV from 260 percent → 160 percent of GDP, but low coverage (23–25 percent) and implicit subsidies persist.
  - further reforms recommended: reduce payroll taxes on firms; increase retirement age in line with life expectancy; improve contribution density and AFP portfolio structures (e.g., multifunds).
- Research priorities: incorporate epidemiological profiles and technological changes into future health-cost projections as data become available.

*Source: _wp0958 (PDF chapter/section) — content provided from the cited IMF document.*

### References..............................................................................................................

### _wp0958 - References..............................................................................................................

### References
- References................................................................................................................................29

### Tables
- 1. Population, Labor and Health Care Coverage Projections ..................................................20
- 2. Health Care and Fiscal Cost Projections..............................................................................24
- 3. Health Care NPV by Type of Obligation.............................................................................26

### Figures
- 1. Retirement Age Gap ..............................................................................................................5
- 2. Evolution of Replacement Rates............................................................................................7
- 3. Expected Replacement Rates Under the Private AFP’s System............................................9
- 4. Pension Contributions: Worker/Firm Share.........................................................................11
- 5. Projected Cash Payments to Support Paygo ........................................................................13
- 6. Estimated NPV of Pension Liabilities .................................................................................14
- 7. Structure of the Health Care System....................................................................................16
- 8. Colombia Health Care and Pension Coverage.....................................................................18
- 9. Health Care Spending ..........................................................................................................19
- 10. GDP Per Capita and Labor Formality Correlation ............................................................22
- 11. Health Care and Fiscal Cost Projections............................................................................24

*Source: _wp0958 - References (PDF), canonical URL: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2009/_wp0958.pdf*

### 12. A Comparison of the NPV of Social Security Public Liabilities of Colombia and

### 12. A Comparison of the NPV of Social Security Public Liabilities of Colombia and the United States

### I. Introduction
- Historical framing:
  - Three salient stages of social security development: origin in Germany (1883), expansion across Europe and the United States (1901–28) with New Deal (1935–36), and a third stage of outsourcing/off-shoring (1980s–1990s) leading to increased labor informality.
- Colombia’s social security path:
  - Pension benefits established in 1967 via a public Pay-as-You-Go System (Paygo) administered by the Instituto de los Seguros Sociales (ISS).
  - Low participation rates pre-1993: only 23–25 percent of the labor market contributed.
  - Law 100 of 1993 created a dual public-private competitive system; private defined-contribution AFPs were introduced.
  - Law 100 of 1993 also aimed for universal health coverage via complex cross subsidies.
- Aggregate fiscal magnitudes (over the period 2007–50):
  - NPV of public pension debt: around 160 percent of GDP.
  - NPV of health system debt: about 97 percent of GDP.
- Policy focus of the chapter:
  - Analysis of parametric pension reforms (retirement age and replacement rates) and health system reforms (coverage and fiscal gap).
  - Use of official simulations for pensions and author’s simulations for health to compute NPV of social security debt.

*Source: IMF Working Paper chapter content.*

### II. Pension Reforms in Colombia

#### A. Retirement age
- Pre-Law 100 of 1993:
  - Public sector retirement ages under Law 33 of 1985: 50/55 (female/male) after 20 years of service.
  - Private sector retirement ages: 55/60 (female/male).
- Life expectancy context:
  - Life expectancy figures cited: 66 at birth or 70 when computed at the age of retirement.
- Retirement Age Gap (RAG) definitions:
  - RAG-Gross = Life expectancy at birth minus official retirement age.
  - RAG-Net = Life expectancy at retirement age minus official retirement age (relevant for fiscal impact).
- Empirical trajectory (females):
  - RAG-Net began at 29 years (mid-1980s) and declined to 26 as retirement age increased from 50 to 57; subsequently RAG-Net rose as life expectancy at retirement increased; retirement age plus life expectancy at retirement increased from 79 to 84 over four decades.
- Empirical trajectory (males):
  - RAG-Net level lower: 21 years, declining to 19 as retirement age increased from 55 to 60; later retirement fixed at 62 and retirement age plus life expectancy at retirement rose from 76 to 82.
- Projections and policy implications:
  - Unless retirement age is increased to 60/65 (female/male) in the near future, RAG-Net projected to expand to 29/21 (female/male) by 2015, exceeding levels at the 1993 reform.
  - Indexing retirement age to life expectancy (to keep RAG-Net constant and preferably below 26/19 female/male) is suggested; for Colombia this implies retirement ages of 64/67 (female/male).
  - Comparison: United States benchmark envisioned at 69 in coming decades.
- Institutional/political constraints:
  - Constitutional Court ruled unlawful article 4 of Law 860 of 2003 that sought to bring forward retirement age increase to 2008 (Court cited “acquired rights”).
  - Changing key pension parameters has required Constitutional amendments (e.g., 2005 amendment fixing date at July 31st of 2010 for cessation of old-age pension parameters, except military and teachers).
  - Result: a prolonged “transitional pension period” spanning more than 20 years (1993–2014).

#### B. Replacement rates
- Definition:
  - Replacement rate = ratio of pension to wage earnings upon which contributions were made.
- Equilibrium example:
  - Contributions of about 10 percent of payroll over 30 years could assure a replacement rate of about 60 percent over 20 years of pension benefits if savings yield a compound real rate of 6 percent per annum.
- Historical Colombian replacement rates:
  - Replacement rates hovered around 75–90 percent during the 1980s and early 1990s; in several public employee cases replacement reached 100 percent.
- Comparative benchmarks:
  - OECD average replacement rates close to 68 percent with contributions in the range of 10–15 percent (Severinson, 2008).
  - United States mode value under paygo around 45 percent (Advisory Council on Social Security, 1997).
- Fiscal consequences:
  - Colombian paygo system moved from surplus (close to 1–2 percent of GDP in 1970s–1980s) to deficit in the mid-2000s.
  - Central government incremental tax support rose from 2 percent of GDP in 1998 up to 4.6 percent of 2008 (equivalent to one-third of tax collections).
- Reforms under Law 100 of 1993 and Law 797 of 2003:
  - Increased qualification requirements: years of service from a minimum of 10 years up to 20 years.
  - Increased contribution rates: from 6–8 percent up to 10–12 percent of wage earnings.
  - Constitutional amendment of 2005 dismantled extra-payment “Mesada 14” for newcomers (ended for people retiring after 2005).
- Expected replacement rates for new pensioners:
  - Policies and assumptions imply average replacement rates in the range of 65–70 percent for new pensioners starting in 2014 (assuming continuation of: contribution density ≈ 50 percent of labor time; low wage contributions below 2 minimum legal wages for nearly 70 percent of contributors).
- Private AFP system returns and implications:
  - Average return on AFP portfolios during 1995–2007: close to 10 percent per-year in real terms.
  - A worker contributing full density for 30 years could obtain replacement rates close to 60 percent under AFPs (about ten percentage points below expected paygo replacement under new rules).
  - High informality likely reduces contribution years to 20–25 (instead of 30–35) and real returns likely to converge to 6 percent (as observed in Chile after 25 years), yielding AFP replacement rates in the range 40–50 percent.
  - Current distribution: about 70 percent of contributors with AFPs and 30 percent remain with paygo.
- Policy measures to contain arbitrage and reversals:
  - Decree 2765 of 2007: FOGAFIN could provide resources to avoid cumulative negative real returns on any AFP account at retirement (following Art. 99 of Law 100 of 1993).
  - Law 797 of 2003 limited switching between regimes to 10 years before retirement.
  - Disputes over exit-bond value for high wage contributors: Decree-Law 1299 of 1994 allowed bond up to 20 minimum wages; Constitutional Court (C-734 of 2005) reduced it to 10 minimum wages for moves after 2006 (T-147 of 2006); this reduction could represent a reduction of about 20 percentage points in replacement rates for those moving from public to private.
  - Implication: high wage-earners likely to remain in public paygo due to declining private returns and capped exit bonds.
- Financial crisis effect:
  - World financial crises of 2007–08 caused record-low returns on Colombian-AFP assets: averaging -2 percent in real terms over the last 36 months (period described in source).
- Proposed improvements:
  - Financial reform proposing “multifunds” or generational portfolios (similar to reforms in Chile 2002, Mexico 2005, Peru 2005) is key to improving long-term returns and return/risk ratios.

#### C. Coverage and labor informality
- Coverage level:
  - Pension system coverage in Colombia currently only 25–27 percent of the active labor force.
- Payroll taxes and informality:
  - Need to reduce payroll taxes and restructure sharing of contributions between workers and firms.
  - Kugler and Kugler (2008): a 10 percent increase in payroll taxes reduces formal employment by between 4 and 5 percent in Colombia.
- Reallocation proposal to reduce firm payroll burden:
  - Substitute “pure tax” payroll components with increases in VAT from 16 percent to 17 percent.
  - Redirect social expenditures currently financed on payrolls (ICBF: 3 percent; Sena: 2 percent) through general budget channels.
  - Dismantle Co-Familiares quasi-fiscal subsidy (4 percent of payrolls), leveraging their accumulated assets.
  - Combined potential reduction on firm payrolls: 9 percentage points.
- Contribution sharing and international comparison:
  - Firms in Colombia absorb nearly 66–75 percent of social security costs; this high share aggravates informality.
  - Chile example: worker pays entire 13.5 percent of payroll; 10.5 percentage points (78 percent) go into his/her account and 3 percentage points cover insurance/administrative fees.
- Colombian contribution structure:
  - Low-wage workers (up to 4 minimum wages) contribute 16.5 percent of payroll; firm pays 75 percent of such contributions; 11.5 percentage points (72 percent) go into private account.
  - For high wage workers the share going into private account falls from 72 to 64 percent.
- Double misalignment of incentives in Colombia:
  - Firms face high labor-related costs (75 percent share) plus extra quasi-fiscal payments (ICBF, Sena, Co-Familiares).
  - Workers face implicit taxes: only 64–72 percent of their payments go into personal accounts (vs. 78 percent in Chile).
- Recommendation:
  - Target contributions into workers’ accounts of 15–20 percent with even sharing between workers and firms.
  - Payroll taxes should not finance redistributive social assistance programs; these should be financed from general tax revenues.

#### D. Fiscal impact of pension reforms
- Summary of transition:
  - Fifteen years after Law 100 of 1993, need to evaluate parametric changes and remaining contingent liabilities over the next 30–50 years.
- Two salient fiscal issues:
  1. Exhaustion of cash reserves of the paygo system earlier than anticipated after migration of younger cohorts to AFPs; public system began using general taxes to pay benefits as early as 2004 (less than four decades after launching paygo and two years before predicted date).
     - Central government forced to allocate about a third of total tax revenues (nearly 5 percent of GDP) to cover pension benefits.
     - Pensioners: about 1 million retirees (6 percent of total population of 43 million) receiving these benefits.
  2. Contingent liabilities estimation requires accounting for:
     - Legal claims for higher pensions under paygo.
     - Additional costs from longer life expectancies under fixed retirement age (increasing RAG-Net).
- Demographic projection:
  - 2005–06 population census indicates by 2050 the percentage of population over 60 years will have tripled to 18 percent.
- Historical cash-reserve dynamics:
  - ISS pension reserves peaked at 2 percent of GDP in 1996 and then declined as contributions were insufficient to honor benefits; reserves exhausted by 2004.
- Long-term fiscal strain:
  - Long-term deficit of the central government estimated around 2–3 percent of GDP (resulting from pension pressures).
- Partial mitigation efforts:
  - 0.2 percent of GDP retained by the central government to help territorial entities pay for pension liabilities (FONPET).
  - Funding of pension liabilities of public oil (ECOPETROL) and telecom sectors via capitalizations/privatizations.
  - Attempts to tax pension benefits and reduce minimum pension guarantee from 100 percent to 75 percent of minimum wage during 2003–06 failed in Congress.
- Official figures:
  - Ministry of Finance and the Planning Department (DNP) official figures: pension expenditure (on a cash basis) increased over 2000–08, reaching 4.6 percent of GDP in 2008.
  - Note (footnote from source): All ratios to GDP in document based on DANE estimates before the historical revision in 2008 which resulted in upward revisions to GDP; for example, 2007 GDP approximately 18 percent higher under new estimates.

*Source: IMF Working Paper chapter content.*

### 5.2 percent of GDP by 2010 (see Figure 5). This use of about a third of total central

### _wp0958 - 5.2 percent of GDP by 2010 (see Figure 5). This use of about a third of total central

### Pension system: fiscal burden, transitions, and NPV of liabilities
- Projected cash payments to support Paygo reach 5.2 percent of GDP by 2010 (see Figure 5).  
- Use of about a third of total central government tax collections to honor pension benefits has burdened the fiscal accounts during the last decade.
- Pension-related asset accumulation in AFP portfolios:
  - Portfolios increased from nearly 2 percent of GDP in 1995 up to 17 percent of GDP by end-2008.
  - Obligatory savings: 14 percent of GDP.
  - Voluntary savings: 2 percent of GDP.
  - Unemployment insurance-payments (cesantias): 1 percent of GDP.
- Official NPV estimates of pension liabilities under the new rules:
  - Net Present Value (NPV) of pension liabilities over 2007–50 under the new rules: nearly 160 percent of 2007 GDP (see Figure 6).
  - NPV under no pension reform (pre-Law 100 of 1993): 260 percent of GDP (Echeverry et al. (2001) and Osorio et al. (2005)).
  - Reduction in NPV due to reforms: about 100 percent of GDP.
  - Comparison with Chile: NPV reduced from 300 percent to 100 percent of GDP (a 200 percent of GDP reduction) as a result of a more expeditious pension transition (Vial, 2008).
- Attribution of the 100 percent of GDP reduction in NPV:
  - About 40 percent of the GDP reduction attributed to Law 100 of 1993 (reduced replacement rates and raised retirement ages).
  - Remaining 60 percent attributable to Laws 797 and 860 of 2003 (further reduced replacement rates) and the Constitutional reform of 2005 (forbade the use of special regimes into the future).
  - If the Constitutional Court had not ruled out (through C-754) bringing forward the effective year for the new pension parameters (as proposed by Art. 4 of Law 860), an additional 16 percent of GDP could have been saved in the public accounts.
  - Judicial rulings imply the need to move early when attempting to change pension parameters (retirement age and/or replacement rates) to avoid court intervention.
- Remaining challenges in pensions:
  - Low pension coverage: 23–25 percent of the working force.
  - Implicit subsidies in the new paygo system rules persist.
  - Policy levers suggested: reduction of payroll taxes levied on firms and increases in retirement ages as life expectancy increases.

### Health reforms under Law 100 of 1993: structure and financing
- Main objective of Law 100 of 1993: achieve universal health care coverage.
- Starting point in early 1990s: 28 percent of the population had health care coverage.
- Pre-Law 100 system comprised three sub-systems: social security (ISS), public regional hospital network, and private system.
- Law 100 introduced a single insurance system based on "cross subsidies" between:
  - Contributive System (CS): health-care contributions cost at 12.5 percent of payrolls, divided between employer (67 percent) and employee (33 percent).
  - Subsidized System (SS): designed for individuals who lack financial means to pay for contributions.
- Institutional arrangements:
  - Insurance component: Empresas Promotoras de Salud (EPS) offering Plan Obligatorio de Salud (POS).
  - Service providers: Instituciones Prestadoras de Salud (IPS).
  - EPS permitted to create their own IPS, enabling vertical integration.
- Fiscal decentralization enacted by Law 60 of 1993 and Law 715 of 2003:
  - About 85 percent of territorial transfers are earmarked for social expenditure.
  - Of those transfers, 60 percent devoted to education and 25 percent for health services.
- FOSYGA (Fondo de Solidaridad y Garantía):
  - Public institution affiliated with the Ministry of Social Protection; principal mechanism for distributing funds within the health system.
  - Contributions received through payrolls are re-allocated to each EPS according to wage level (Unidad de Pago por Capitacion, UPC) and POS services.
  - Remaining funds help FOSYGA pay for the subsidized component (SS).
  - The gap between collected funds and expenditures to be supplied by the central government.
- Harmonization and legal changes:
  - POS plans differed among systems and social strata during 1993–2007; the constitutional court ordered harmonization of benefits (T-760 of 2008).
  - Law 1122 of 2007 imposed a limit of 30 percent on new services contracted through integrated EPS-IPS to promote larger competition.

### Health care results: coverage, financing shares, and expenditures
- Coverage increases:
  - Health care coverage increased from 28 percent in the early 1990s up to 86 percent by end-2006 (see Figure 8).
  - Subsidized system (SS) coverage rose from 4.8 million (12.4 percent of the population) to nearly 20 million (46 percent of the population).
  - Contributive system (CS) coverage tripled from 5 million (13 percent of the population) to almost 17 million (40 percent of the population).
  - Special programs (including military) add an additional coverage of 2 percent; total coverage close to 88 percent of the population.
- Financing imbalance:
  - Expected financing mix: two-thirds from the Contributive System (CS) and one-third from the Subsidized System (SS).
  - Actual financing in 2006: CS financing only 55 percent of health costs; SS financing the remaining 45 percent, including public and private services.
  - Ratio of workers actively contributing / labor force in health services increased from 30 percent to 37 percent during 2002–07.
  - Ratio of those contributing to pensions remained at 27 percent (ten percentage points lower than health contributors), given retirees continue to contribute to the health system at a reduced rate.
  - Anticipated aggravation of CS/SS imbalance if labor informality persists, causing additional fiscal stress.
- Health care spending:
  - In 2003, Colombia spent the equivalent of 7.7 percent of GDP on health care after averaging 8.5 percent of GDP from 1998–2002.
  - Barón (2007): health care spending increased from 6.2 percent to 7.7 percent of GDP between 1993 and 2003, mainly due to coverage expansion (see Figure 9).
  - Figure 9 indicators (1993–2003):
    - Total 7.8 (as % of GDP) [figure label].
    - Total health care expenditure: 6.2 (presumably baseline year in figure).
    - Public: 3.1.
    - Private: 4.7 (and 4.8 shown in figure labels).
  - Comparative context:
    - Colombia’s health-care expenditure surpasses Chile (5.9 percent of GDP) and Mexico (5.7 percent of GDP).
    - Correcting by GDP-per-capita, Colombia’s health-care expenditure is about 36 percent above the world average (Gottret, et al., 2008).
    - Colombia’s expenditure on health care is above average levels observed in United Kingdom (7.3 percent of GDP) and Japan (7.6 percent of GDP) during 1993–2003.

### Fiscal impact of health care reforms and projection approach
- Drivers of health care cost (Oliveira et al., 2006):
  - Demographic factors: population growth and epidemiological profiles.
  - Nondemographic factors: income evolution and technological changes.
- OECD benchmark: health care spending increased at an annual rate of 3.6 percent during 1981–2002, with income factors accounting for 2.3 percent.
- Projection methodology described:
  - Build a simple accounting framework to project evolution of health-related revenues and expenditures (health accounts) in Colombia.
  - Constraints: lack of information on epidemiological profiles and technological changes for Colombia; analysis concentrates on population growth, income, labor participation rates, and labor formality rates.
  - Steps:
    - Take stock of overall situation in 2006 and compute the (implicit) fiscal imbalance.
    - Make projections of health accounts over 2007–50, with a key variable being evolution of labor formality, which drives contributions into the Contributory System (CS).
    - Compute the NPV of health-care public obligations.
- Demographic baseline:
  - In 2006, total population of Colombia estimated at 43 million.
  - Rate of population expansion has been decelerating: 1.5–1.85 percent per-year between 1987–93 down to 1.25– (text truncates here).

*Source: _wp0958 (PDF chapter/section) — content provided from the cited IMF document.*

### 1.5 percent over the period 1993–2006. In this light, it is reasonable to assume that

### _wp0958 - 1.5 percent over the period 1993–2006. In this light, it is reasonable to assume that

### Population, labor, and health-care coverage projections
- Population growth assumed to decelerate and reach about 1 percent per-annum in 2020–50.
- Table 1 (Millions of people) population and coverage figures:
  - Total population: 43.2 (2006), 50.8 (2020), 68.5 (2050)
  - Working age population (78%): 33.8 (2006), 39.6 (2020), 53.4 (2050)
  - Employed population: 17.9 (2006), 21.0 (2020), 28.3 (2050)
  - Contributive system members: 20.1 (2006), 26.8 (2020), 34.3 (2050)
  - Subsidized system members: 17.0 (2006), 21.3 (2020), 32.6 (2050)
- In 2006:
  - WAP/total population ≈ 78 percent.
  - employed/WAP = 53 percent.
  - open unemployment long-term average = 10.5 percent; crisis years 1998–2002: 14–16 percent; 2007–08 average = 11 percent.
  - workers actively contributing to health care as a percentage of labor force = 37 percent.
- Family density per contributor = 2.26 persons per contributor (average of last five years).
- CS per-capita cost (UPC) recognized by the FOSYGA to the EPS in 2006 = $408,000 (or US$203 per beneficiary).
- UPC value of the full subsidy = 4.4 percent of the annual LMW.

### Sources and uses of the health care system; contributors by wage
- Contributor wage group definitions and shares:
  - High-wage: average = 12 times the LMW; represents 1 percent of total contributors.
  - Medium-wage: average = 6 times the LMW; represents 12 percent of total contributors.
  - Low-wage: average = 2 times the LMW; represents 87 percent of total contributors.
- Out-of-pocket supplementary health expenditures (as percent of annual LMW, from 2001 household survey):
  - High-wage workers = 1.3 percent of the annual LMW.
  - Medium-wage workers = 2.4 percent of the annual LMW.
  - Low-wage workers = 1.6 percent of the annual LMW.
- Assumed government capital contributions to public hospitals and state health enterprises ≈ $100,000 (or US$50) per member attended through the ISS.
- Other FOSYGA accounts (Solidarity, Accident/Catastrophes, Promotion-Prevention) maintained at 0.4 percent of the UPC value.
- Judicial costs: preliminary data suggest nine of every ten lawsuits are resolved in favor of the patient; FOSYGA reimburses EPS from national budget; technical health board created under Law 1122 of 2007; Constitutional Court ruling C-463 of 2008 orders EPS to implement board recommendations when seeking reimbursement for expenses not covered by health plans.

### Baseline assumptions and scenarios modeled
- Baseline scenario assumptions:
  1. population growth beginning at 1.18 percent per-year during 2006–10 and ending at 1 percent per-year over 2020–50;
  2. health coverage increasing from 86 percent to 98 percent of the population;
  3. contributors/employed ratio increasing from 40 percent to 50 percent.
- Historical correlation between GDP per capita and labor formality (1979–2003) used to set targets for contributors/employed.
- Scenario summaries (Table 2 and text):
  - Status-quo labor formality: contributors/employed = 40 percent (constant).
  - Improved labor formality (baseline): contributors/employed increases from 40 percent to 50 percent.
  - High labor formality improvement: contributors/employed increases from 40 percent to 60 percent (2006–50), potentially adding about 2.5 million contributors relative to baseline.

### Health care fiscal impact (2006 base-year and projections)
- 2006 fiscal balances and sectoral detail:
  - Health care sector deficit close to 2.1 percent of GDP in 2006.
  - Revenue/expenditure balance (CS+SS) shows a deficit of 1.9 percent of GDP (small surplus for CS, large deficit for SS).
  - Private sector produced a slight surplus = 0.1 percent of GDP in 2006.
  - Public sector recorded a deficit = 2.2 percent of GDP in 2006.
  - Public sector makes contributions on behalf of 1 million employees = 6 percent of all employed workers; divided between regional employees (5 percent) and central government employees (95 percent).
  - Regional/local authorities contribute 15 percent of partial subsidy and 60 percent of full subsidy; remainder funded by FOSYGA (central government).
  - Central government fiscal deficit in 2006 = 4.4 percent of GDP; consolidated fiscal deficit ≈ 1 percent of GDP.
- Baseline scenario projection (contributors/employed from 40% to 50%):
  - public health care deficit increases from 2.1 percent of GDP in 2006 to a peak of 4.3 percent in 2038.
  - deficit thereafter stabilizes in the range of 3.0–3.5 percent of GDP through 2050.
- Three phases over 2006–50:
  1. 2006–10 (expansion): coverage expansion causes deficit deterioration from 2.1 percent to 2.8 percent of GDP; government adds 4.7 million SS affiliates (to total 24.8 million) and 0.5 million to CS (to total 17.8 million); earnings contributions growth = 0.7 percent of GDP in 2006–10.
  2. 2010–35 (organic growth): steady fiscal deterioration; deficit rises from 2.8 percent to a maximum of 3.8 percent of GDP due mainly to demographic factors and affiliated population growth from 42.6 million (92 percent of population) to 56.7 million (96 percent of population); contributors/employed improves from 40 percent to 47 percent.
  3. 2036–50 (stabilization/destabilization): deficit declines from 3.8 percent to 2 percent of GDP as contributors/employed increases from 47 percent to 50 percent.
- Status-quo scenario (contributors/employed constant at 40 percent):
  - potential loss of about 3 million new contributors relative to baseline.
  - health care system fiscal deficit: 3.8 percent of GDP by 2020 (≈ ½ percent of GDP higher than baseline); 6.8 percent of GDP by 2050 (≈ 4.9 percentage points of GDP above baseline).
- High labor formality improvement scenario (contributors/employed to 60 percent):
  - adds about 2.5 million contributors relative to baseline.
  - CS component increases to 45 percent–56 percent; SS component decreases from 55 percent to 44 percent.
  - health care deficit peaks at 3.2 percent of GDP by 2024 (≈ ½ percent of GDP below baseline).
  - by 2034 deficit eases to 2.6 percent of GDP.
  - by 2050 system could reach a surplus ≈ 1.9 percent of GDP.

### Net Present Value (NPV) of projected fiscal obligations (health care) over 2006–50
- Baseline scenario (discount rates and results):
  - Discount rate i = 4.0%:
    - Gross public spending = -107.0 (% GDP of 2007).
    - Net public duties (deficit) = -96.9 (% GDP).
    - Net private spending (surplus) = +35.5 (% GDP).
    - Total balance (public+private) = -61.4 (% GDP).
  - Discount rate i = 5.0%:
    - Gross public spending = -90.5 (% GDP).
    - Net public duties (deficit) = -80.1 (% GDP).
    - Net private spending (surplus) = +27.2 (% GDP).
    - Total balance (public+private) = -52.8 (% GDP).
- Comparison with pension NPV:
  - NPV of pension obligations (projected over 2007–50) ≈ 160 percent of GDP.
  - Health obligations (baseline, discounted at 4 percent) ≈ 97 percent of GDP.
  - Pensions/health obligations ratio in Colombia ≈ 1.7 (160 / 97).
- International benchmark cited:
  - Contingent liability of Medicare in the United States (excluding Medicaid) = 90 percent of GDP; including Medicaid = 259 percent of GDP.
  - NPV of pension obligations in the United States estimated = 117 percent of GDP.
  - Pension/health ratio in the United States: about 1.3 times excluding Medicaid; 0.45 when including Medicaid.

### Key policy implications and conclusions
- Law 100 of 1993 shifted substantial health system burden to public resources due to high labor informality and small share of population in the contributory system.
- Achieving universal coverage (government goal assumed by 2011 in analysis) increases fiscal burden unless labor formality and contribution ratios improve.
- Labor market reforms that increase contributors/employed (formalization, payroll tax reductions, labor flexibility) can materially improve fiscal outcomes for health and pensions.
- Under baseline improvements in labor formality (contributors/employed 40% → 50%), public health deficit peaks at 4.3 percent of GDP in 2038 and stabilizes at 3.0–3.5 percent of GDP through 2050; NPV health obligations ≈ 97 percent of GDP (discounted at 4 percent).
- If contributors/employed rises to 60 percent (high formality scenario), health system could reach a surplus ≈ 1.9 percent of GDP by 2050.
- Pension challenges remain significant: reforms reduced pension NPV from 260 percent to 160 percent of GDP, but low pension coverage (23–25 percent of working force) and implicit subsidies persist; further reforms suggested: reduce payroll taxes on firms and increase retirement age in line with life expectancy.
- Future research should incorporate epidemiological profiles and technological changes as more information becomes available.

*Source: Author's computations and estimates contained in the provided document.*

### References

### References

### Pensions and Pension Reform
- Advisory Council on Social Security, 1997, Report of the 1994–96 Advisory Council, Vol. I (Washington: U.S. Government Printing Office).
- Arenas de Mesa, A., and M. C. Llanes, 2006, “Reformas a los sistemas de pensiones, efectos institucionales y fiscales: cuatro casos de estudio, Argentina, Colombia, México y Uruguay,” Programa de Cooperación Técnica Española (Washington: Inter-American Development Bank).
- Clavijo, S., 1998, “Fiscal Effects of the 1993 Colombian Pension Reform,” IMF Working Paper WP/98/158 (Washington: International Monetary Fund).
- Conrads, E., 2008, “Multifondos: Experiencias y Tendencias,” Sistema de Capitalización: Su Aporte a la Solución del Problema de Pensiones” (FIAP and CIEDESS).
- Jousten, A., 2007, “Public Pension Reform: A Primer,” IMF Working Paper WP/07/28 (Washington: International Monetary Fund).
- Severinson, C., 2008, “The Adequacy of Pension Systems in OECD Countries,” in Insurance and Private Pensions, No 28, OECD.
- Vial, J., 2008, “Efectos Fiscales de la Reforma Previsional en Chile, Sistema de Capitalizacion: Su Aporte a la Solución del Problema de Pensiones (FIAP and CIEDESS).

### Health Care Financing, Coverage, and Projections
- Bernanke, B. S., 2008, “Challenges for Health Care Reform,” Speech at the Senate Finance Committee Health Reform Summit, Washington, June 16.
- Barón, G., 2007, “Cuentas de la salud de Colombia 1993–2003: El gasto nacional en salud y su financiamiento,” Social Protection Ministry and National Planning Department, DNP.
- Carrasquilla, A., 2008, “Aseguramiento en salud y falla migratoria,” Revista Carta Financiera, No. 143 (July–September).
- Clavijo, S., and C. Torrente, 2008, “El costo de la universalización de la salud en Colombia,” Informe Semanal de Anif, No. 947 (September).
- Gottret, P., G. J. Schieber, and H. R. Waters, 2008, Good Practices in Health Financing: Lessons from Reforms in Low- and Middle-Income Countries (Washington: World Bank).
- Masis-Pinto, D., 2008, “Colombia: Good Practices in Expanding Health Care Coverage,” in Good Practices in Health Financing (Washington: World Bank).
- Olivera, J., C. Maisonneuve, and S. Bjoernerud, 2007, “Projections of OECD Health Care and Long-Term Care Expenditures,” Paper presented at the Banca D ́Italia Fiscal Workshop held in Perugia, March 30–April 1, 2006.
- Przywara, B., and D. Costello, 2007, “Health Care Expenditure Projections: Results, Policy Conclusions and Recommendations for Future Work,” Paper presented at the Banca D ́Italia Fiscal Workshop held in Perugia, April 3–5, 2008.
- Santa Maria, M., and F.Garcia, 2008, “El sistema de salud colombiano,” Revista Carta Financiera No. 143 (July–September).
- Weisbrod, B., 1991, “The Health Care Quadrilemma,” Journal of Economic Literature (June).

### Fiscal Policy, Public Debt, and Macroeconomic Performance
- Clavijo, S., 1995, “A Survey of Economic Reforms and Macroeconomic Performance: A Comparative Study of Chile and Colombia 1970–94,” IMF Working Paper WP/95/139 (Washington: International Monetary Fund).
- Clavijo, S., 2004, “Public Debt, Contingent Liabilities, and ‘Debt Tolerance’: The Case of Colombia,” Paper presented at the Banca D ́Italia Fiscal Workshop held in Perugia, March 30–April 1, 2006.
- Clavijo, S., 2007, “Impacto Económico de Algunas Sentencias de la Corte: El Caso de la Mesada Catorce y las Leyes de Vivienda,” Dialogo entre Abogados y Economistas sobre la Constitución en el Aspecto Económico (Bogotá: Ministerio de Hacienda y Crédito Público).
- Echeverry, J.C., A. Escobar, C. Merchán, G. Piraquive, and M. Santa María, 2001, “Elementos para el debate sobre una nueva reforma fiscal en Colombia,” Archivos de Economía, No. 156 (Bogotá: Departamento Nacional de Planeación).
- Follete, G., and L. Sheiner, 2006, “A Microeconomic Perspective on the Sustainability of Health Care Spending Growth in the United States,” Paper presented at the Banca D ́Italia Fiscal Workshop held in Perugia, April 3–5, 2008.
- Olivera, J., C. Maisonneuve, and S. Bjoernerud, 2007, “Projections of OECD Health Care and Long-Term Care Expenditures,” Paper presented at the Banca D ́Italia Fiscal Workshop held in Perugia, March 30–April 1, 2006.
- Przywara, B., and D. Costello, 2007, “Health Care Expenditure Projections: Results, Policy Conclusions and Recommendations for Future Work,” Paper presented at the Banca D ́Italia Fiscal Workshop held in Perugia, April 3–5, 2008.

### Labor Markets, Employment, and Payroll Tax Effects
- Cardenas, M., and R. Bernal, 2003, “Determinants of Labor Demand in Colombia 1976–96,” NBER-Working Paper No. 10077 (November).
- Kugler, A., and M. Kugler, 2008, “Labor Market Effects of Payroll Taxes in Developing Countries: Evidence From Colombia,” Working Paper Series, No. 13855 (March), National Bureau of Economic Research.
- Osorio, J. H., J. Martínez, and T. Rodríguez, 2005, “El Modelo DNPensión 4.0,” Archivos de Economía, No. 285 (Bogotá: Departamento Nacional de Planeación).
- Clavijo, S., and L.I. Lozano, 2001, “Generación de Empleo y Parafiscalidad: Soluciones Estructurales en Tiempos de Crisis,” Revista del Banco de la República (Bogotá: Banco de la República, October).
- Urrutia, M., 1969, The Development of the Colombian Labor Movement (New Haven: Yale University Press).

### Country and Regional Studies
- Bushnell, D., 1993, The Making of Modern Colombia: A Nation in Spite of Itself (Berkeley: University of California Press).
- ECLAC, 2007, “Panorama Social de la América Latina,” Comisión Económica para la América Latina (November).
- Masis-Pinto, D., 2008, “Colombia: Good Practices in Expanding Health Care Coverage,” in Good Practices in Health Financing (Washington: World Bank).
- Santa Maria, M., and F.Garcia, 2008, “El sistema de salud colombiano,” Revista Carta Financiera No. 143 (July–September).

### Workshops, Papers, and Policy Discussions
- Clavijo, S., 2004, “Public Debt, Contingent Liabilities, and ‘Debt Tolerance’: The Case of Colombia,” Paper presented at the Banca D ́Italia Fiscal Workshop held in Perugia, March 30–April 1, 2006.
- Follete, G., and L. Sheiner, 2006, “A Microeconomic Perspective on the Sustainability of Health Care Spending Growth in the United States,” Paper presented at the Banca D ́Italia Fiscal Workshop held in Perugia, April 3–5, 2008.
- Olivera, J., C. Maisonneuve, and S. Bjoernerud, 2007, “Projections of OECD Health Care and Long-Term Care Expenditures,” Paper presented at the Banca D ́Italia Fiscal Workshop held in Perugia, March 30–April 1, 2006.
- Przywara, B., and D. Costello, 2007, “Health Care Expenditure Projections: Results, Policy Conclusions and Recommendations for Future Work,” Paper presented at the Banca D ́Italia Fiscal Workshop held in Perugia, April 3–5, 2008.

*Source: _wp0958 - References*

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