Budgetary Impact of Social Security Privatization: Women Doubly Unprotected

Abstract:

In several developing economies during the 1990s there was a fundamental financial reform of pension systems. This article analyzes the main results of these reforms through a gender approach. Seen as a social reform, pension reforms have maintained a growing uninsured population, with women experiencing relatively greater workplace precariousness and, at the same time, longer lives. The article also centers on fiscal implications, and particularly the transition from a pure public pay-as-you-go pension system that was self-funded and sustainable, to a system in which contributions went to private pension funds, creating a funding gap, which is being filled by the public budget in several current pension schemes. As a financial reform, it has also had several interesting results. Although the private system did not increase coverage and the projected flows, it did produce a constant flow of mandatory and accumulated savings that provide liquidity to domestic financial markets and even external markets. However, this liquidity has not been a factor in increasing the flows of credit to the nonfinancial domestic private sector. Under the conditions of austerity policies, budget cuts in other components of social spending, such as education and especially health care, leave women doubly unprotected.

Keywords:

• gender equality
• pension funds
• public budget

Additional information

Notes on contributors

Eugenia Correa

The author is a professor in the Faculty of Economics of the Autonomous National University of Mexico (UNAM). A first draft of this article was presented at the Twenty-Fourth Annual Conference of the International Association for Feminist Economics (IAFFE) “Gender Equality in Challenging Times,” July 16–18, 2015, Berlin, Germany. The author is thankful for the financial support provided by the Institute for New Economic Thinking and DGAPA-UNAM.