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What Are the Main Socio-Economic and Behavioral Characteristics That Determine Voluntary Pension Contributions for Self-Employed Workers in Chile?
By Valentina Ciriotto, Camila Cuevas, Francisco Aravena
This study contributes to the literature by examining how socio-economic and behavioral characteristics such as neighborhood income inequality and peer effects determine voluntary pension contributions for self-employed workers in Chile. We use a survey representative of the Chilean household sector and we run five different probit regressions to elucidate voluntary contributions to the pension system for self-employed workers. Additionally, we run probit models with a heteroscedastic structure (hetprobit models). The results show that the driving forces of the decision to contribute for retirement are significantly related to age, income, sex, area of residence, education, belonging to or from indigenous descent, multidimensional poverty, job formality, cash transfers, having a current account and credit card. Exceptionally, this study finds that behavioral aspects, that where not considered in depth so far both in research and public policy, are significant in savings contribution. Our research concludes that neighborhood income inequality and peer effects should be further analyzed as part of the context for which public policies are designed.
Source: SSRN
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