| This dissertation examines the savings implications of social security schemes, through their savings mobilization potential as institutions and through their impact on the savings behavior of households. The traditional wisdom has been that social security systems, through the surpluses they generate, especially in the period prior to their maturity when liabilities are still few and contributions growing, can provide a significant source of savings in the economy. However, whether surpluses generated represent additional savings which increase the total value of national savings depends on how the system affects other savings behaivor, on the design of the system, and on the management of the system and the surplus. The factors enabling social security institutions to generate surpluses and the pressures which social insurance systems are likely to undergo in the course of their maturation are discussed in the context of the Chilean system, one of the oldest social insurance programs in the world. The tentative conclusions are that the savings mobilization potential of social security is realized only under special circumstances. These circumstances are described and illustrated in a survey of selected Asian systems whose experience provides contrast to that of the Chilean system. The conclusion to which this comparison of experience points is that such savings mobilization as takes place through a social insurance scheme may be short lived, that pressures arising in the course of maturation encourage a switch from full funding with its savings mobilization potential to pay-as-you-go financing, and that the savings goal is an elusive one and frequently not compatible with other objectives to be achieved through the system. |
