On Lessons from Pension Reform in the Americas
It has been over a quarter of a century since Chile introduced a series of radical changes to its pension system. Many other countries, especially in the Americas, have followed Chile either fully or, most often, partially.
In an era when major policy reforms are being reevaluated, and countries like Chile are pursuing a "reform of the reform," Lessons from Pension Reform in the Americas, coedited by Atlanta Fed economist Stephen Kay, is the first to evaluate pension reform in the Americas in the "post-privatization" era. This book assesses both successes and failures. It considers the breadth of the region's reforms, from the privatizations inspired by Chile's landmark reform that has captured so much attention to the parametric measures of Brazil's recent reforms. It covers not only reforms undertaken by large countries like Canada, Mexico, and the United States but also critical yet understudied reforms in smaller countries like Costa Rica and Uruguay.
The book also examines universal policy challenges, including the impact of pension reform with respect to gender, decision-making processes surrounding reform, and the role of default choices in program design. A foreword by Nobel laureate Robert W. Fogel on evolving demographic challenges and a chapter on World Bank policies, written by three current and former World Bank specialists, complete the picture and provide cues and clues for future directions in pension reforms around the world.
Of the numerous lessons drawn in the book, three are particularly noteworthy: pension reforms need to be complemented by second-generation measures to the retirement systems and new policies that usually affect other parts of the economy, such as fiscal policy, health policy, and the labor and financial markets; pension reform should be seen as an ongoing process through which pension schemes can adapt to the continuous changes in economic and labor conditions; and reforming pension systems inevitably involves political risk, but such risk is something that governments must be prepared to face in maintaining and strengthening the systems they have adopted.
The Americas have been the site of the world's most significant pension reforms. The analyses presented in this book by leading experts provide valuable insight as governments everywhere consider how best to proceed with pension reform. This book is written for anyone with an interest in social security and pension reform and is geared to both specialists and nonspecialists alike.
Adapted with permission from Lessons from Pension Reform in the Americas (2008), Oxford University Press and the Pension Research Council of the Wharton School