Skip to main content
The Chilean Pension System at 25 Years: The Evolution of a Revolution
Journal of Economic Issues
  • Gregory J. Buchholz, Missouri Southern State University
  • Alberto Coustasse, University of North Texas Health Science Center
  • Patricio Silva, Universidad Diego Portales
  • Peter E. Hilsenrath, University of North Texas Health Science Center
Document Type
Publication Date
The 1981 reform of the Chilean pension system was revolutionary at its time. It was the first instance of a mature public Pay-As-You-Go social security system being converted into a mandatory defined contribution system managed by the private sector. This paper contends that a unique confluence of events were responsible for this change. The rise of a dictatorship in Chile, a struggling public retirement system, and a cadre of Chicago oriented economists determined to make Chile a model free market neoliberal economy. This was later followed by the Washington Consensus and the promotion of Chilean reform by the World Bank. This paper analyzes the Chilean reform and its subsequent development; evaluating it on both efficiency and equity grounds. While the evidence for efficiency gains is mixed there is little doubt that equity has suffered under the new system. Nevertheless, it continues to evolve and equity concerns are increasingly being addressed.
Citation Information
Gregory J. Buchholz, Alberto Coustasse, Patricio Silva and Peter E. Hilsenrath. "The Chilean Pension System at 25 Years: The Evolution of a Revolution" Journal of Economic Issues Vol. 42 Iss. 3 (2008) p. 633 - 647 ISSN: 0021-3624
Available at: