New paper: Personal retirement accounts and saving

The RAND Corporation released a new working paper by Emma Aguila entitled "Personal retirement accounts and saving," which examines the degree to which individuals given personal retirement accounts as part of Social Security reform might reduce their other retirement saving. Aguila used the Mexican social security reforms, in which only part of the population was enrolled in personal accounts, to analyze how account holders and non-account holders changed their saving habits after the accounts were put in place. Aguila found that a significant portion of the new saving in personal accounts was offset by reduced retirement savings outside of the pension system. To the degree that account holders reduce their other saving the accounts have not accomplished their primary goal, which is to build assets to prefund future retirement income. Click here to download the paper.