The Myth of Economic Incentives around the Debate on the Design of Optimal Pension Systems. A Survival Analysis for the Argentine Case

GERI, MILVA; VILLAREAL, FERNANDA

Politics & Policy

Wiley

Año: 2022

From a panel of administrative data of contributors to the Argentine pension system, a survival analysis was carried out to compare the time in months until contributor status is lost in individuals who reach the minimum retirement age. The analysis involves two periods: one where the fully funded scheme was in force and the other with the pure pay-as-you-go scheme in effect. It is observed that the survival curve of the contributor status during the second period is always above that in the first one, indicating that the probability of maintaining this status was always higher during the second period. Likewise, it was found that belonging to the cohort/group of the first period is significant in explaining the risk of losing contributor status, even controlling for other relevant variables. This result contrasts with the predictions of the World Bank about the best incentives that the fully funded scheme would generate for the supply of formal labor.