Minimun Pension Insurance in the Chilean Pension System

dc.creatorZurita, Salvador
dc.date2014-07-31T21:16:47Z
dc.date2014-07-31T21:16:47Z
dc.date1994
dc.date.accessioned2018-04-19T21:03:35Z
dc.date.available2018-04-19T21:03:35Z
dc.identifierRevista de Análisis Económico 9(1): 1994, p. 106-126
dc.identifier0716-5927
dc.identifiereISSN 0718-8870
dc.identifier
dc.identifierhttp://repositorio.uahurtado.cl/handle/11242/1656
dc.identifier.urihttp://repositorioslatinoamericanos.uchile.cl/handle/2250/1370680
dc.descriptionOne of the "social" features of the Chilean individual capitalization pension system is the minimum pension scheme. which guarantees its members a minimum pension irrespective of the funds they accumulate, with the only requirement of twenty years of social security tax payments. The purpose of this paper is to estimate the implicit fiscal subsidy, using an option-based approach. We capture the risk associated to the returns on the pension fund account of a worker by modeling its value as a diffusion process and show the correspondence between the minimum pension insurance and a financial put option. Our results are the present value of the minimum pension benefit, equivalent to 3 percent of Chilean GDP for current active and non-active affiliated workers. These estimates are notoriously higher than previous results based on deterministic models, and strongly suggest the importance of explicitly considering the risk associated to pension assets when estimating the cost to the government of the insurance implied by the minimum pension benefit.
dc.languageeng
dc.publisherILADES; Georgetown University; Universidad Alberto Hurtado. Facultad de Economía y Negocios
dc.rightsAttribution 3.0 Unported
dc.rightshttp://creativecommons.org/licenses/by/3.0/
dc.subjectPensiones -- Chile
dc.subjectSeguridad social
dc.titleMinimun Pension Insurance in the Chilean Pension System
dc.typeArtículos de revistas


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