Macroeconomic Impact of the Pension Funds

• DOI: 10.22533/at.ed.2162202219106

• Palavras-chave: -

• Keywords: -

• Abstract:

  The reform of the Dominican pension system evidences a structural change by moving from a pay-as-you-go system to one of individual capitalization. This consolidates three key elements. The first unifies all workers in a single system. The second standardizes contribution rates and the third individualizes pension funds. At the same time, said reform sought a transition guaranteed by the State with important fiscal implications. In this context, the new rules of the system induce changes in the behavior of the various agents in society. From an economic perspective, the pension system reform has direct effects on the economy. According to the literature, the transmission of effects is carried out through four basic channels: 1) savings and domestic investment, 2) employment, 3) capital markets and 4) factor productivity. The macroeconomic evaluation, therefore, is a transversal task whose ultimate goal is to determine the impact of the pension funds on the level and growth of the Gross Domestic Product (GDP).