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

52 Pages Posted: 15 Feb 2006

See all articles by Robert Holzmann

Robert Holzmann

University of Malaya; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); World Bank

Date Written: August 1996

Abstract

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.

JEL Classification: G23, O16, O46, O54

Suggested Citation

Holzmann, Robert, Pension Reform, Financial Market Development, and Economic Growth: Preliminary Evidence from Chile (August 1996). IMF Working Paper No. 96/94, Available at SSRN: https://ssrn.com/abstract=882990

Robert Holzmann (Contact Author)

University of Malaya ( email )

University of Malaya
Kuala Lumpur, Wilayah Persekutuan 50603
Malaysia

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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