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The Mexican defined contribution pension system: perspective for low income workers (English)

This paper analyzes the structure and perspectives of the current pension system, introduced in 1997 as part of Mexico's structural changes. In particular, it focuses on the effects of the system on poverty after retirement and emphasizes the redistributive component of its design. In addition, there is an analysis of alternative forms for financing pensions at the end of the working lives of affiliates. Finally, there are some recommendations to improve the functioning and financing of the system.


  • Author

    Azuara, Oliver

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  • Document Type

    Working Paper

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  • Region

    Latin America & Caribbean,

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  • Doc Name

    The Mexican defined contribution pension system: perspective for low income workers

  • Keywords

    minimum pension;pension system;number of children per woman;minimum wage;individual account;social security system;short period of time;structure of labor market;real interest rate;pay as you go;age structure of population;real rate of return;annual labor force growth;defined contribution system;population living in poverty;private sector worker;fiscal cost;individual retirement account;labor market condition;rates of return;working life;demand for service;people in poverty;average income level;consumer price index;additional voluntary contribution;private insurance company;working age population;reduction of mortality;high population growth;democratic political system;cost of transfer;years of schooling;individual savings accounts;incidence of poverty;average interest rate;interest rate increases;number of workers;defined benefit scheme;return on asset;adjustments for inflation;measure of poverty;management of resources;correlation between poverty;form of saving;Fixed income securities;fixed income security;individual pension account;defined contribution pension;social security law;pension fund system;Demographic Transition;wage level;low-income worker;real return;life expectancy;formal sector;voluntary saving;replacement rate;



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Azuara, Oliver

The Mexican defined contribution pension system: perspective for low income workers (English). Washington, D.C. : World Bank Group.