From the Brazilian Pay-As-You-Go Pension System to Capitalization: Bailing out the Government

Authors

  • José L. Carvalho Instituto de Ciências Econômicas e Gestão Universidade Santa Ursula (ICEG/USU) and EPGE/FGV image/svg+xml
  • Clovis De Faro Escola de Pós-Graduação em Economia Fundação Getúlio Vargas (EPGE/FGV) image/svg+xml

Keywords:

Brazil, pay-as-you-go, capitalization, pension reform, transition costs, government financing

Abstract

Given that the current official pension plan in Brazil is not feasible, several reform proposals have been recently submitted. In a previous work, we have developed a scheme which has its fundamentals based on a market approach. A recurrent criticism to this proposal is centered on the fact that we estimated the present value of the transition costs without considering the flow of funds necessary for the government to implement it. The purpose of this paper is to estimate this flow of funds, taking into account the fact that the government will maintain all the benefit payments associated with the present system. Subsidiarily, we will also suggest a scheme for the government financing of such a flow of funds.

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References

Arrau, P. (1992). El nuevo régimen previsional chileno [Ponencia]. Seminario Internacional de Reformas al Régimen Pensional, Bogotá.

Arrau, P., & Schmidt-Hebbel, K. (1993). Macroeconomic and intergenerational welfare effects of a transition from pay-as-you-go to fully-funded pension systems [Ponencia]. XII Latin American Meeting of the Econometric Society, Tucumán.

Arrau, P., Valdés-Prieto, S., & Schmidt-Hebbel, K. (1993). Privately managed pension systems: Design issues and the Chilean experience [Ponencia]. XII Latin American Meeting of the Econometric Society, Tucumán, Argentina.

Carvalho, J. L., & De Faro, C. (1993). Previdência social no Brasil: Uma proposta de reforma. In C. de Faro (Ed.), Previdência social no Brasil: Diagnósticos e sugestões de reforma. Editora da Fundação Getúlio Vargas.

Carvalho Filho, C. (1993). Proposta de reforma da seguridade social: Uma visão crítica. Planejamento e Políticas Públicas, 9, 101–143.

De Faro, C. (Ed.). (1993). Previdência social no Brasil: Diagnósticos e sugestões de reforma. Editora da Fundação Getúlio Vargas.

Diamond, P. (1993). Privatization of social security: Lessons from Chile [Ponencia]. XII Latin American Meeting of the Econometric Society, Tucumán, Argentina.

Mattos Filho, A. O. (Coord.). (1993). Reforma fiscal: Coletânea de estudos técnicos (2 vols.). DBA-Dórea Books and Art.

Medici, A., Oliveira, F. E. B., & Beltrão, K. (1993). Subsídios para a reforma constitucional no campo da seguridade social: Visão histórica e perspectivas. Planejamento e Políticas Públicas, 9, 1–71.

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Published

1994-04-30

How to Cite

Carvalho, J. L., & De Faro, C. (1994). From the Brazilian Pay-As-You-Go Pension System to Capitalization: Bailing out the Government. Economic Analysis Review, 9(1), 237–249. Retrieved from https://www.rae-ear.org/index.php/rae/article/view/193

Issue

Vol. 9 No. 1 (1994)

Section

Articles

License

Copyright (c) 1994 José L. Carvalho, Clovis De Faro

Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

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