TY  - JOUR
AU  - Edwards,Sebastian
AU  - Edwards,Alejandra Cox
TI  - Social Security Privatization Reform and Labor Markets: The Case of Chile
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8924
PY  - 2002
Y2  - May 2002
UR  - http://www.nber.org/papers/w8924
L1  - http://www.nber.org/papers/w8924.pdf
N1  - Author contact info:
Sebastian Edwards
UCLA Anderson Graduate School of Business
110 Westwood Plaza, Suite C508
Box 951481
Los Angeles, CA 90095-1481
Tel: 310/206-6797
Fax: 310/206-5825
E-Mail: sebastian.edwards@anderson.ucla.edu
AB  - We analyze the way in which social security privatization reform affects labor market outcomes.  We develop a model of the labor market where we assume that, as is the case in most emerging markets, a formal and an informal sectors coexist side by side. According to our model, a social security reform that reduces the implicit tax on labor in the formal sector, will result in an increase in the wage rate in the informal sector and will have an undetermined effect on aggregate unemployment.  Results from simulation exercises suggest that in the case of Chile the reforms resulted in an increase in informal sector wages of approximately 2.0%.  These results also suggest that the reforms made a positive, but small, contribution to the reduction of Chile's aggregate of unemployment.
ER  -