We present a new database of social security indicators for 11 Latin-American countries designed to show how much they promise to pay in return to contributions. These are based on micro-simulations according to existing norms. We use response-surface analysis to characterize simulation results. Our results indicate that most programs are progressive. The length of service (LOS) has a strong impact on the expected returns to contributions. In several programs, the expected rates of return exhibit striking discontinuities in the LOS, mostly due to vesting period conditions. This implies these programs may be exacerbating income risk.
|Journal||Journal of Pension Economics and Finance|
|Publication status||Published - Jul 2012|
- incentives to work
- Internal rate of return
- replacement rate