SHARING KNOWLEDGE ON RETIREMENT SAVINGS
In this section you can find some of our publications on the topic of retirement savings.
This document presents the Retirement Savings Laboratorys (Laboratory) main findings, lessons, and challenges from several pilot interventions aimed at promoting voluntary pension savings among independent and low-income workers in Chile, Colombia, Mexico and Peru. The interventions were implemented over four years using various tools based on behavioral economics and new technologies. The four main lessons that were obtained are: (1) Solutions linked to a source of income have a significant impact on generating voluntary savings. However, scaling them for the low-income and self-employed population is challenging; (2) Reminders are easy to scale and cost-effective, but they have little impact on saving for retirement and they dont always work; (3) Making saving easy must be accompanied by better financial and social security education; (4) Betting on voluntary retirement savings requires institutional leadership to overcome regulatory and technological barriers, as well market failures that make it difficult to implement scalable and effective savings solutions. Finally, the document offers a perspective on how to move towards a voluntary savings pillar for the entire adult population by creating a favorable regulatory environment, designing inclusive financial products, and leveraging technology to expand outreach to more people and offer simple and accessible savings channels.
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Evasion of labor market regulations in middle income countries is systemic. This is generally known as informality. In Latin America, where less than 50% of workers are registered with social security, this is a permanent phenomenon and encompasses a variety of economic realities ranging from subsistence self-employment to evasion of certain regulations including social security contributions. In this study we analyze the role of enforcement in curbing informality in large formal firms in Peru, where informality levels are around 70%. Through the Peruvian National Labor Control Superintendence (SUNAFIL) we randomly sent 697 letters to formal Peruvian firms of more than 50 workers, indicating their obligation to enroll workers in social insurance systems (health and pensions). Two types of letters were sent, one with a deterrence message and one emphasizing the benefits of formalization. One year after the letters were sent, we found a positive and statistically significant effect on the number of workers enrolled in social security (9.8% on average). Only strict deterrence messages had a significant impact, and only in very large firms. This evidence suggests that there is room for improvement in compliance with labor regulations through more proactive monitoring and behavioral tools such as reminders, but effects could be concentrated in the largest firms.