Work Histories and Pension Entitlements in Argentina, Chile and Uruguay

Abstract

We propose alternative methods to project pension rights and implement them in Chile and Uruguay and partially in Argentina. We use incomplete work histories databases from the social security administrations to project entire lifetime work histories. We first fit linear probability and duration models of the contribution status and dynamic linear models of the income level. We then run Monte Carlo simulations to project work histories and compute pension rights. According to our results, significant swathes of the population would not access to fundamental pension benefits at age 65, if the current eligibility rules were strictly enforced.

To Share or Not to Share: That Is the Question

“…The distribution of the density of contributions has two modes and is strongly asymmetric (figure 14.1). A similar pattern has been reported in Argentina (Bertranou and Sánchez 2003;Farall et al 2003), Chile (Berstein, Larraín, and Pino 2006;Bravo et al 2006), and Uruguay (Lagomarsino and Lanzilotta 2004;Forteza et al 2009;Bucheli, Forteza, and Rossi 2010). In the sample, 26 percent of the workers have a full contribution density, which was the most frequent density of contributions in the database.…”

“…Figure 13.2 presents the distribution of this density for men and women in Chile, estimated by Forteza et al (2009Forteza et al ( ), using individual administrative data between 1981Forteza et al ( and 2004, for a representative sample of 24,000 participants in the AFP system. 4 Clearly, the distribution shows important differences between the contributory behavior of men and women.…”

“…records for the period 1996-2004 (Forteza et al 2009). The model used to compare the two alternative pension regimes in the present context simulates the paths of labor income and contributions, assuming that the patterns of participation, the distribution of income within the cohort, and associated contributions remain unchanged in the future.…”

Social Security and Retirement in Uruguay

“…6. For a detailed explanation of the models used to complete work histories, see Forteza et al (2009). 7.…”

“…A sample of the work history records was made available to the research community and have been used to analyse the impact of social security reforms on individual behaviour and the macroeconomy (Álvarez et al, 2010Bucheli, Forteza, & Rossi, 2010;Forteza et al, 2009). Existing studies are based on the estimation of reduced form models, though, and are not immune to the Lucas critique: the policy response parameters being estimated are not necessarily invariant to policy changes.…”