A Proposal for the Equalisation of Retirement Age Across Genders in Chile

This paper has been produced as part of their course work by students doing the MPP or MPA
degrees in the School of Public Policy at the London School of Economics.

Abstract: 

Chilean women in the 50th percentile reach the 60-year retirement age with $10,494 USD in their pension fund account – 65% less than their male counterparts, who retire five years later. This paper proposes a pathway for the equalisation of retirement age across genders in Chile. For women below the age of 50, we suggest adjusting retirement age upward at the gentle rate of three months per year. For those aged above 50, prolonged stay in the labour market is voluntary, but supported by the state, which pays the 10% contribution rate to the pension fund on their behalf – an effective 11% salary increase. This policy increases women’s savings at retirement by 49.3% at the cost of 0.13% of the Chilean annual budget. With the awareness that pension reform is a notoriously complex process, we suggest a political strategy based on gender equity to facilitate the transition.