New Cato Study Looks at Social Security Reform Around the World

October 30, 2001

The Cato Institute has released a new study by José Piñera, architect of Chile’s successfully privatized Social Security system that examines the worldwide move toward investment-based Social Security. The former Chilean Minister of Labor and Social Security, Piñera now serves as co-chairman of Cato’s Project on Social Security Privatization and President of the International Center for Pension Reform. In “Liberating workers: The World Pension Revolution,” (Cato’s Letter no. 15, October 2001), he argues that privatizing public pensions offers a unique opportunity to empower workers and give them the chance to accumulate assets and own wealth, creating a world of worker-capitalists.

Piñera examines the Reforms in Chile that set the stage for the worldwide pension revolution and shows how the principles of those reforms have been used—with greater and lesser degrees of success— in countries from Latin America to Eastern Europe. Among the countries he examines are Mexico, Bolivia, El Salvador, Columbia, Argentina, Uruguay, Hungry, Poland, Kazakhstan, and Sweden.

Looking at coming Social Security crises in the United States and western Europe, he argues that only transforming bankrupt Pay-As-You-Go Social Security systems into systems based on individually owned, privately invested accounts can provide both fiscal stability and worker security.

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