Determinants of second pillar pension reforms: Economic crisis and globalization

Abstract

© Cambridge University Press 2019. In this paper, we examine reforms characterized by the establishment of mandatory funded privately-managed schemes in the social security framework. We construct a new dataset to analyze the determinants of pension reforms over 1980-2012 in about 100 medium and large economies around the world. Our results highlight the fundamental importance of economic forces in explaining the speed of reforms after adjusting for the confounding effects of demographic and geopolitical factors. Countries with greater globalization growth and a history of economic crisis experienced a shorter time until reform. These findings are robust to variations in empirical methodology.