Argentina is one of the largest economies in South America. In recent years, the government has focused in promoting economic development along with social inclusion with the support of the World Bank.
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Argentina's Social Security system
is one of the older retirement programs in the Americas,
with an important coverage rate and a large number of
retired workers. ... Show More +The system was reformed in 1994, creating
a multipillar model with both Pay-As-You-Go (PAYG) and
fully-funded components. This paper analyzes the potential
distributive effects of the new system, using a lifetime
income approach. This study calculates rates of return
offered by the system to different socioeconomic groups,
given the alternative schemes workers can choose from.
Among sociodeomographic and economic groups, women are
better off than men, mostly because of the lower retirement
age and higher expectancy of life. Also civil servants seem
to be the best position occupational group, and a not very
surprising regressive effect by income level was detected.
This study shows that the new system will not be neutral
with respect to income distribution, and more important,
that the expected effects are not necessarily those that
were proposed during the reform process. Show Less -