Welfare Reform on the Web (November 2001): Pensions - Overseas

PRIVATISING PUBLIC PENSION SYSTEMS: LESSONS FROM LATIN AMERICA

J.B. Williamson

Journal of Ageing Studies, vol.15, 2001, p.285-302

This analysis examines the advantages and disadvantages of privatising public pension schemes based on the Latin American experience. Study draws on evidence from four countries that have fully privatised their public pension schemes (Chile, Mexico, Bolivia and El Salvador) and four that have partially privatised (Argentina, Uraguay, Colombia and Peru). Some evidence suggests that privatisation is contributing to the development of financial institutions and the availability of investment capital. It may also be increasing national savings rates and the rates of economic growth, although there is less agreement on these issues. The benefits of privatisation go to high wage male workers, with few benefits for low wage and female workers. As a result, privatisation contributes to both income and gender inequality.