PENSION UNIVERSAL PROPORCIONAL: Una propuesta para México

Contributory pension system coverage has been historically low. High mobility between formal and informal sector results in low contribution density which does not guarantee a minimum pension. The state has created cash transfer programs, which can disincentive formality. This paper proposes a propo...

Full description

Saved in:
Bibliographic Details
Published in:Trimestre económico 2014-10, Vol.81 (4), p.839
Main Authors: Amezcua, F Alejandro Villagómez, Sierra, Gabriel Darío Ramírez
Format: Article
Language:Spanish
Subjects:
Animal migration
Informal economy
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Contributory pension system coverage has been historically low. High mobility between formal and informal sector results in low contribution density which does not guarantee a minimum pension. The state has created cash transfer programs, which can disincentive formality. This paper proposes a proportional pension for formal employees, which replaces the fixed cash transfer, following the experience of Chile (2008). We follow the Valdés-Prieto approach (2008), which minimizes labor-market distortions. Under the assumption of linear income trajectory, we show that the total value of pensions can increase in 45.6% on average, and fiscal savings in 14.8% when compared to a non-contributory pension programas "65 y más".
ISSN:0041-3011