Non-Contributory Pensions and Savings: Evidence from Argentina

56 Pages Posted: 25 Apr 2017

See all articles by Martín González-Rozada

Martín González-Rozada

Universidad Torcuato Di Tella

Hernán Ruffo

Universidad Torcuato Di Tella

Date Written: April 2016


This paper examines the effects of Argentina's Plan de Inclusion Previsional (PIP), which changed the pension system in a way that generated a new noncontributory pillar, produced a huge expansion in pension coverage between 2005 and 2008 and a transfer of a vast amount of resources to households. Using a difference in differences methodology it is found that the PIP policy has reduced the incentives to work and to be in the labor force of those workers directly affected by the policy, mostly women of retirement age, but also some younger workers. The policy increases consumption of food and non-durable goods and health expenditure by beneficiary households. At the same time, the policy reduced incentives to save. Thus, the overall effect of the noncontributory pension scheme implies a substantial reduction in national savings.

Keywords: Pension, Saving, Households, Consumption, Labor force participation

JEL Classification: D14, E21, E23, H55

Suggested Citation

González Rozada, Martín and Ruffo, Hernán, Non-Contributory Pensions and Savings: Evidence from Argentina (April 2016). IDB Working Paper No. IDB-WP-629, Available at SSRN: or

Martín González Rozada (Contact Author)

Universidad Torcuato Di Tella ( email )

Saenz Valiente 1010
Buenos Aires, C1428BIJ
5411 51697318 (Phone)


Hernán Ruffo

Universidad Torcuato Di Tella ( email )

Minones 2159
C1428ATG Buenos Aires, 1428

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