Pension Reform, Financial Market Development, and Economic Growth: Preliminary Evidence From Chile
August 1, 1996
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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.
Subject: Capital formation, Expenditure, Financial markets, Financial sector development, National accounts, Pension reform, Pension spending, Private savings
Keywords: Capital formation, Central and Eastern Europe, economic growth, financial market, Financial sector development, investment rate, investment volume, labor market, labor market participation, market activity, Pension reform, Pension spending, Private savings, private sector, rate of return, saving rate, stock market exchange, WP
Pages:
52
Volume:
1996
DOI:
---
Issue:
094
Series:
Working Paper No. 1996/094
Stock No:
WPIEA0941996
ISBN:
9781451950755
ISSN:
1018-5941
Notes
Also published in Staff Papers, Vol. 44, No. 2, June 1997.
