Spanish
Santo Domingo, RD. – A study conducted by the Superintendence of Pensions (SIPEN), in collaboration with the World Bank, reveals that at younger ages, there is a more polarized workforce with workers who remain for extended periods without contributing to the pension system, while, at older ages, the number of workers transitioning between formal and informal employment increases.
It also reveals that the implementation of the solidarity pillar, included in law 87-01, along with the dynamics of the labor market, limits the possibility of the system achieving the goal of guaranteeing lifelong minimum pensions, which is why the study suggests evaluating the relevant parameters of the system, especially those related to the right to a guaranteed minimum pension.
These results seek to evaluate the functioning and sustainability of the Dominican Pension System (SDP).
This study evaluates the work history of Dominican workers, with the purpose of analyzing labor informality and its impact on workers' pensions.
The study categorizes workers into two groups, those who contribute to the SDP (formal) and those who do not contribute (informal), revealing that the longer a worker remains contributing, or not contributing to the system, the less likely they are to change their status, as these patterns vary mainly according to the person's age and income level.
The information is contained in a recently published study on Labor History and Contribution Density in the SDP, conducted by Ignacio Apella, an economist with the World Bank's Global Practice on Social Protection and Labor in Latin America and the Caribbean, and Gonzalo Zunino, researcher and director of the Center for Economic Research (CINVE) of Uruguay.
This study proposes a survival model to estimate the entry and exit risk rates of formality in the pension system.
In this work, the employment history of workers affiliated with the Dominican Republic's pension system and their contribution frequency were analyzed, applying a duration model to estimate the transition risk rates between formality and informality.
The current design of the Dominican Republic's pension system provides coverage to the entire population over 60 years of age.
Subsequently, considering the estimated risk rates, Monte Carlo simulations were performed to project complete work histories.
Through these studies and collaboration agreements with different multilateral organizations, such as the World Bank, SIPEN ratifies its commitment to safeguard the rights of affiliates and their beneficiaries, ensuring the integrity and sustainability of our system.
