Research

En este documento estudiamos la magnitud, las causas y consecuencias de las desigualdades de género que existen en el sistema previsional colombiano y discutimos alternativas de política pública que contribuyan a solucionar o mitigar estas diferencias. Usando información de encuestas de hogares y datos administrativos, se documenta que, comparada con un hombre mayor, la probabilidad de que una mujer mayor acceda a una pensión contributiva es 11 puntos porcentuales (p.p.) menor y tiene una mayor probabilidad de encontrarse en niveles de ingresos pensionales bajos. La baja cobertura del sistema de pensiones contributivo (apenas 1 de cada 4 colombianos reciben una pensión contributiva), hace que la vulnerabilidad económica de las personas mayores, especialmente mujeres y los hogares más vulnerables, recaiga sobre cambios en la estructura del hogar (personas mayores viven con parientes jóvenes), transferencias por parte de sus familias y transferencias no contributivas. Además, el documento discute diversas opciones de política para abordar estas brechas, incluyendo cambios en el sistema de pensiones y la implementación de políticas no contributivas o universales para garantizar la seguridad financiera de la población mayor, especialmente las mujeres. Al evaluar los costos fiscales de estas medidas, cerrar las brechas de género del sistema previsional colombiano requerirá de esfuerzos fiscales importantes, siendo más efectivo la ampliación de sistemas no contributivos que alcancen a la población no pensionada.

Múltiples estudios han subrayado la necesidad urgente de reformar el sistema pensional colombiano, y la mayor parte de la discusión se ha centrado en proponer la implementación de alguna opción de reforma y sustentar las ventajas de esta alternativa. Este documento aborda una perspectiva diferente: compara las principales alternativas que han sido presentadas en años recientes para mejorar tanto el sistema contributivo como los programas solidarios y transparenta los dilemas a la luz de distintos objetivos de política. Además, el documento explora alternativas de reforma que mejoran la viabilidad de los productos de retiro y que son capaces de alinear la actuación de las administradoras con los intereses a largo plazo de los afiliados. Finalmente, se discuten alternativas para la creación de capacidades institucionales que fortalezcan los mecanismos de rendición de cuentas y faciliten la adaptación del sistema en el futuro. Las avenidas de reforma discutidas a lo largo del documento tienen distintos beneficios y costos dependiendo de los objetivos que se estén considerando. Por lo tanto, la elección de una opción dependerá del tipo de contrato social alrededor del cual haya un consenso como país.

We estimate the possible effects on poverty and income distribution of the crisis unleashed by Covid-19 on a group of Latin America and Caribbean countries, representing 80% of the total population in the region: Argentina, Brasil, Chile, Colombia, Ecuador, Honduras, Mexico, Paraguay, Peru, and Uruguay. We use household survey data from pre-crisis national household surveys and, based on prospective scenarios of vulnerability to the shock, we compute the impact that income losses may have on a country's poverty levels and inequality. Our vulnerability scenarios are based on the national policies used to prevent the rapid expansion of the Coronavirus. Additionally, for a sub-sample of 6 countries (Brazil, Chile, Colombia, Ecuador, Mexico and Peru) we use Input-Output linkages to estimate direct and indirect shocks to consider how the differences of the productive structures, economic linkages, and labor market characteristics of each country could result in different effects on poverty and inequality. We find a significant increase on poverty headcount ranging from 25% to 33% percent in our different estimations. The results show heterogeneity on the exposure to the shocks. Two main factors explain differences across countries: their level of specialization in activities labeled as essential (e.g., agriculture, public sector, food retail) and their level of employment protection and stability (i.e., type of contract and employment in larger firms). We find a higher vulnerability to the propagation of the shocks in countries with a bigger agricultural sector, and less vulnerability in countries with bigger firms, and lower informality.

Emerging economies are characterized by an extremely high prevalence of informality, small-firm employment and jobs not fit for working from home. These features factor into how the COVID-19 crisis has affected the economy. We develop a framework that, based on accounting identities and actual data, quantifies potential job and income losses during the crisis and recovery for economies with different economic organization structures. Our analysis incorporates differential exposure of jobs across categories of firm-size and formality status, as well as sectors and occupations. We account for the direct supply shock caused by lockdowns, the idiosyncratic demand shock suffered by sectors that rely on high contact with their costumers, the transmission of both shocks through IO linkages, and the overall aggregate demand effect derived from these shocks. Applying our framework to data for Colombia, which exhibits an employment distribution similar to that of other emerging market countries, in particular Latin America, we find that well over 50% of jobs are at risk in the initial stages of the crisis. Because informal jobs and those not fit for telework are at higher risk, this number goes down to 33% if the US employment distribution is imposed on the Colombian data. As the crisis deepens, the risk of unemployment grows. However, informality rebounds quickly in the recovery, an employment at risk is quickly reduced to 20% of the baseline, all concentrated in formal jobs. Our findings point to the importance of action to maintain formal matches from dissolving, given their scarcity and rebuilding difficulty, while protecting the poor and the informal via income transfers.

This paper describes how future pension benefits affect labor supply in economies that have an informal sector (i.e., a sector that does not comply with government regulation). From the perspective of a worker, a formal-sector job will offer long-run gains because it will increase the worker's expected pension benefits in the future. If workers take those gains into account when they search for formal-sector jobs, the pension system affects formal-sector labor supply. I estimate the causal link between future pension benefits and formal-sector labor supply using a cohort-based reform undertaken in Colombia. I find that a reduction in future pension benefits generates a reallocation of labor supply from taxable (formal) to non-taxable (informal)jobs and that this change does not affect labor force participation. The estimated effect is heterogeneous and is consistent with the predictions of a life-cycle model with a pension system and informal job opportunities. The effect is concentrated among workers for whom the minimum qualifying conditions are binding, and among workers with higher expected pension gains. The results presented here suggest that pension reforms have the potential to create large efficiency costs, an effect that should be considered when designing pension programs.

(A previous version of this paper titled "Pension incentives and Formal-Sector Labor Supply: Evidence from Colombia" can be found here)

This paper analyzes the effect of payroll taxes on formal-sector labor demand in the presence of wage rigidity. In particular, I study the impact of a reduction of payroll taxes on the creation of formal-sector jobs in Colombia, where about 40 percent of formal-sector workers earn the minimum wage. Using a reform that granted tax credits to firms hiring workers younger than 28 years of age, I obtain estimates of the effect of payroll taxes on formal-sector employment and wages. I show that payroll tax incidence is borne by formal-sector employers. The reduction in payroll taxes increased formal-sector employment and had no effects on wages. Using the estimation results, I recover an estimate of the elasticity of the formal-sector labor demand of −0.44. This result implies that a 10 percent increase in the minimum wage reduces formal-sector employment by 4.4 percent.