On the Efficiency of Mandatory Retirement Savings Under Endogenous Borrowing Constraints

8 Pages Posted: 18 Jun 2019

See all articles by Oliver Pardo

Oliver Pardo

Pontificia Universidad Javeriana, Bogotá

Date Written: June 6, 2019

Abstract

Mandatory contributions to retirement savings accounts may tighten existing borrowing constraints, forcing individuals to forgo profitable investment options. This welfare-detrimental effect can be offset if retirement savings are allowed to serve as collateral. Moreover, some credit market imperfections may disappear altogether if this later policy is combined with a pension system with unconditional basic savings.

Keywords: pensions, mandatory savings, borrowing constraints

JEL Classification: D14, E21, G11, H55

Suggested Citation

Pardo, Oliver, On the Efficiency of Mandatory Retirement Savings Under Endogenous Borrowing Constraints (June 6, 2019). Available at SSRN: https://ssrn.com/abstract=3400354 or http://dx.doi.org/10.2139/ssrn.3400354

Oliver Pardo (Contact Author)

Pontificia Universidad Javeriana, Bogotá ( email )

Calle 40 # 6-23
Bogota, CO 110231
Colombia

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