Determinants of second pillar pension reforms: economic crisis and globalization

Abstract

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.

A shift to libertarian paternalism in old‐age income security: Discourses on pension privatization reforms in Lithuania 2016–2018

“…These reversal strategies led to a shift in social security and social welfare studies as well – from an earlier focus on the analysis of global trend towards privatization (Orenstein, 2008; Müller, 2003; Adascalitei and Domonkos, 2018), to a study of the drivers that accounted for divergent paths of retrenchment reforms across the region. While analysis emphasized the importance of economic and institutional factors (see for example, Fong and Leibrecht, 2019; Fultz and Hirose, 2019; Altiparmakov, 2018; World Bank, 2013), the impact of ideational factors that framed debates on changes in pensions systems, while discussed, remains less investigated (Kohli and Arza, 2011).…”