Estimados Académicos y Académicas FEN,

Les extendemos la invitación al seminario que organiza el Departamento de Economía, en el que se presentará el trabajo titulado "Pension Privastization, Behavioral Responses, an Income in Ols Age: Evidence from a Cohort-Based Reform".

Expone: Marcelo Bergolo, Profesor, Instituto de Economía, Universidad de la República del Uruguay.

Co-autores: Maximiliano Lauletta.

Abstract: This paper studies the effect of privatizing the pension system on workers’ earnings, employment patterns, retirement behavior, and old-age income. We study on a pension reform in Uruguay that transitioned from a defined benefits pay-as-you-go system to a mixed system, which allocates a fraction of social security contributions to individual retirement accounts. Leveraging a cohort-based discon-tinuity in the introduction of the new system, we employ a regression discontinuity design using rich administrative and census data. We find significant labor supply responses to privatization. Workers in the privatized system are more likely to remain employed in their fifties, driven in part by reduced early retirement rates, particularly among low-wealth individuals and those with mild disabilities. In addition, workers in the privatized system report higher earnings early in their careers, likely due to reduced tax  evasion. Regarding old-age income, we find little difference between the two systems in early old age. However, two decades after privatization, the government allowed workers to revert to the non-privatized system, which a significant share of workers opted for, especially among those who did not choose the most profitable retirement savings option and those whose career profiles favor defined benefits formulas. Overall, our findings indicate that pension privatization can increase labor force participation among the elderly and improve tax compliance. However, it may negatively impact the pension income of some workers, shedding light on the push to reverse privatizations in several countries over the past two decades.

El formato será presencial y el seminario se desarrollará en la Sala P-304.

Saludos cordiales,

Dirección de Investigación