Measuring the Redistributive Effect of Pensions

Produced by: 
Universidad de la República - Uruguay
Available from: 
December 2017
Paper author(s): 
Alvaro Forteza
Topic: 
Labor
Poverty - Inequality - Aid Effectiveness
Year: 
2018

In this document, I present a conceptual framework for the analysis of the redistributive effect of pensions. The paper makes specific recommendations on the controversial issue of whether pensions should be treated as transfers or deferred income. I show that most pension programs have both dimensions in different degrees and present a proposal to deal with them in a unified framework. The proposal has specific recommendations in terms of accounting and counterfactuals. Using some simple examples, I show that usual accounting and “nonbehavioral” assumptions —particularly regarding non-labor income— may be very misleading.

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