Publication:
A Theory of Contribution Density and Implications for Pension Design

Simple item page
dc.contributor.authorValdés-Prieto, Salvador
dc.date.accessioned2014-09-17T17:24:34Z
dc.date.available2014-09-17T17:24:34Z
dc.date.issued2008-07
dc.description.abstractThe adequacy of contributory pensions for the middle classes depends on density of contribution. Density can be far below 100% because the State is unable or unwilling to impose the mandate to contribute on all jobs, especially on poor workers such as many in self-employment and small firms. The paper presents a model where individuals choose whether to bundle saving for old age in a covered job or to save independently while choosing an uncovered job. The determinants of the effective rate of return offered by the contributory pension plan include the earnings differential. This return is then compared with the returns offered by pure saving in the financial market, to determine the equilibrium density of contribution. The paper also applies the model to assess two standard designs for noncontributory subsidies for the old poor. It finds that these standard designs crowd out contributory pensions for the middle classes by reducing density. The paper also considers two second-generation designs for noncontributory subsidies and other approaches to raise density. This model also allows optimization of the combined multipillar structure, where participants get noncontributory pensions and also contributory pensions based on both mandates and fiscal incentives.en
dc.identifierhttp://documents.worldbank.org/curated/en/2008/07/20170243/theory-contribution-density-implications-pension-design
dc.identifier.doi10.1596/20198
dc.identifier.urihttps://hdl.handle.net/10986/20198
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesSocial protection and labor discussion paper;no. 0828
dc.rightsCC BY 3.0 IGO
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectBANK LENDING
dc.subjectBENEFICIARIES
dc.subjectBENEFICIARY
dc.subjectBUDGET CONSTRAINT
dc.subjectBUDGET CONSTRAINTS
dc.subjectBUSINESS CYCLE
dc.subjectCAPITAL ACCUMULATION
dc.subjectCAPITAL STOCK
dc.subjectCASH TRANSFERS
dc.subjectCHILD LABOR
dc.subjectCOMMUNITY DEVELOPMENT
dc.subjectCONSUMER CREDIT
dc.subjectCONSUMER DEBT
dc.subjectCONSUMER LOANS
dc.subjectCORPORATE INCOME TAXES
dc.subjectCREDIT LIMITS
dc.subjectCREDITOR
dc.subjectCS
dc.subjectDEBTOR
dc.subjectDEMOCRACY
dc.subjectDEMOGRAPHIC
dc.subjectDEMOGRAPHIC CHANGE
dc.subjectDERIVATIVES
dc.subjectDISABILITIES
dc.subjectDISABILITY
dc.subjectDISCOUNT RATE
dc.subjectDIVORCE
dc.subjectEARLY CHILDHOOD
dc.subjectEARNED INCOME TAX CREDIT
dc.subjectEARNINGS
dc.subjectECONOMIC DEVELOPMENT
dc.subjectEMERGING ECONOMIES
dc.subjectEMPLOYEE
dc.subjectEMPLOYER
dc.subjectEMPLOYERS
dc.subjectEMPOWERMENT
dc.subjectEXPENDITURE
dc.subjectFINANCIAL MARKET
dc.subjectFINANCIAL SAVING
dc.subjectFINANCIAL SUSTAINABILITY
dc.subjectFISCAL POLICY
dc.subjectFIXED RATE
dc.subjectFOOD PRICES
dc.subjectFRAUD
dc.subjectFUTURE GROWTH
dc.subjectGLOBALIZATION
dc.subjectGROWTH RATE
dc.subjectHOME
dc.subjectHOUSEHOLD INCOME
dc.subjectHOUSEHOLDS
dc.subjectHUMAN CAPITAL
dc.subjectHUMAN DEVELOPMENT
dc.subjectILLIQUIDITY
dc.subjectIMPLICIT TAX
dc.subjectIMPLICIT TAXES
dc.subjectINCOME
dc.subjectINCOME FLOWS
dc.subjectINCOME LEVELS
dc.subjectINCOME TAX
dc.subjectINCOME TAX CREDIT
dc.subjectINCOME TAXES
dc.subjectINCOMES
dc.subjectINEQUALITY
dc.subjectINFORMATION SYSTEMS
dc.subjectINSTITUTION BUILDING
dc.subjectINSTRUMENT
dc.subjectINSURANCE
dc.subjectINSURANCE POLICIES
dc.subjectINTEREST PAYMENTS
dc.subjectINTEREST RATE
dc.subjectINTERNAL RATE OF RETURN
dc.subjectINVENTORY
dc.subjectJOB CREATION
dc.subjectJOB SECURITY
dc.subjectJUDGES
dc.subjectLABOR LAWS
dc.subjectLABOR MARKET
dc.subjectLABOR MARKETS
dc.subjectLEGISLATION
dc.subjectLENDER
dc.subjectLIEN
dc.subjectLIFE EXPECTANCY
dc.subjectLIQUIDATION
dc.subjectMARGINAL TAX RATES
dc.subjectMARKET TRENDS
dc.subjectMATURITY
dc.subjectNATIONAL DEBT
dc.subjectNATIONAL SAVING
dc.subjectOLD AGE CRISIS
dc.subjectOLD-AGE PENSION
dc.subjectOLD-AGE PENSIONS
dc.subjectOPEN ECONOMY
dc.subjectPENSION
dc.subjectPENSION CONTRIBUTIONS
dc.subjectPENSION FUND
dc.subjectPENSION REFORM
dc.subjectPENSION RIGHTS
dc.subjectPENSION SYSTEM
dc.subjectPENSION SYSTEMS
dc.subjectPENSIONS
dc.subjectPERSONAL INCOME
dc.subjectPERSONAL INCOME TAX
dc.subjectPHYSICAL CAPITAL
dc.subjectPOLITICAL ECONOMY
dc.subjectPOLITICAL STABILITY
dc.subjectPROPERTY RIGHTS
dc.subjectPUBLIC FINANCE
dc.subjectPUBLIC PENSIONS
dc.subjectRATE OF RETURN
dc.subjectREAL INTEREST
dc.subjectREAL INTEREST RATE
dc.subjectREPLACEMENT RATE
dc.subjectREPLACEMENT RATES
dc.subjectRETURNS
dc.subjectRISK AVERSION
dc.subjectSAVINGS
dc.subjectSELF-EMPLOYMENT
dc.subjectSELF-FINANCE
dc.subjectSOCIAL FUNDS
dc.subjectSOCIAL INSURANCE
dc.subjectSOCIAL NETWORKS
dc.subjectSOCIAL PROTECTION
dc.subjectSOCIAL SAFETY NET
dc.subjectSOCIAL SAFETY NETS
dc.subjectSOCIAL SECURITY
dc.subjectSOCIAL SECURITY SYSTEM
dc.subjectSOCIAL VALUE
dc.subjectSOCIAL WELFARE
dc.subjectSOURCE OF INCOME
dc.subjectSTATE SUPPORT
dc.subjectSTATE SUPPORTS
dc.subjectTAX
dc.subjectTAX CREDIT
dc.subjectTAX INCENTIVES
dc.subjectTAX RATE
dc.subjectTAX RATES
dc.subjectTAX REGIMES
dc.subjectTAX SYSTEM
dc.subjectTAX TREATMENT
dc.subjectTAXATION
dc.subjectTHIRD WORLD
dc.subjectTRANCHE
dc.subjectTRANCHES
dc.subjectTRANSITION COUNTRIES
dc.subjectTRANSPARENCY
dc.subjectTURNOVER
dc.subjectUNEMPLOYMENT
dc.subjectUNEMPLOYMENT INSURANCE
dc.subjectUNEMPLOYMENT RATE
dc.subjectVALUATION
dc.subjectWILL
dc.subjectWITHDRAWAL
dc.subjectWOMAN
dc.titleA Theory of Contribution Density and Implications for Pension Designen
dspace.entity.typePublication
okr.crosscuttingsolutionareaGender
okr.date.disclosure2014-09-03
okr.date.doiregistration2025-05-05T11:54:44.623026Z
okr.doctypePublications & Research::Working Paper
okr.docurlhttp://documents.worldbank.org/curated/en/2008/07/20170243/theory-contribution-density-implications-pension-design
okr.globalpracticeMacroeconomics and Fiscal Management
okr.globalpracticeFinance and Markets
okr.globalpracticeGovernance
okr.globalpracticeTrade and Competitiveness
okr.guid416871468149082496
okr.identifier.externaldocumentum000470435_20140903125220
okr.identifier.internaldocumentum20170243
okr.identifier.report90344
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2014/09/03/000470435_20140903125220/Rendered/PDF/903440NWP0P1320Box0385283B00PUBLIC0.pdfen
okr.topicFinance and Financial Sector Development::Access to Finance
okr.topicTaxation and Subsidies
okr.topicGender::Gender and Law
okr.topicPrivate Sector Development::Emerging Markets
okr.topicFinance and Financial Sector Development::Debt Markets
okr.topicMacroeconomics and Economic Growth
okr.unitSocial Protect & Labor - GP (GSPDR)
okr.volume1 of 1
Files
Original bundle
Now showing 1 - 2 of 2
Thumbnail Image
Name:
903440NWP0P1320Box0385283B00PUBLIC0.pdf
Size:
750.13 KB
Format:
Adobe Portable Document Format
Download
No Thumbnail Available
Name:
903440NWP0P1320Box0385283B00PUBLIC0.txt
Size:
120.02 KB
Format:
Plain Text
Download
License bundle
Now showing 1 - 1 of 1
No Thumbnail Available
Name:
license.txt
Size:
1.71 KB
Format:
Plain Text
Description:
Download
Collections
Social Protection and Jobs Discussion Papers