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Seminarios académicos y conferencias

Salvador Valdés, PUC-Economía

"Densidad de cotizaciones: Una cuestión de ingreso"

Coautoreado con Samuel Leyton

13 marzo 2019 - 15:30 hrs.

Sala de Postgrado, Facultad de Ciencias Económicas y Administrativas UC

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Abstract: The ability of old-age pension systems to replace earnings from work is impaired when cumulative contribution frequencies fall, or remain at a low level. Although the short-term frequency of mandatory contributions is mildly correlated with earnings, this may be washed out or deepened over the working life. This study uses data from one of the few countries where the data for individuals who completed less than 10 or 15 years of contribution over the working life is available for completed working lives. The data comes from a longitudinal survey in Chile, matched with administrative data. Using instrumental variables, we find that in the range of either moderate and low relative earnings or less than 15 years of contributions, lifetime cumulative frequency of contributions is strongly controlled by a novel indicator: relative taxable earnings averaged over the working life. Outside this region the cumulative frequency of contribution is constant. It is also found that financial literacy has no influence on cumulative frequency of contribution. Several mechanisms are suggested to explain why this novel indicator is an important controlling variable for cumulative contribution frequency. In the case of Chile, they lead to enforcement inequality.