WASHINGTON, United States, Thursday April 19, 2018 – The Inter-American Development Bank (IDB) has launched the Retirement Savings Laboratory, a project that seeks to increase the number of people saving for retirement in Latin America and the Caribbean.
According to the IDB, most workers in Latin America and the Caribbean are not saving for retirement, which will make it difficult for them to have a good life when they reach old age, especially for low-income and independent workers.
“The main causes of under saving for retirement are problems in the way labour markets function, the design of pension systems, and the psychological barriers inherent to human nature. This explains why, although the surveys show that workers in the region want to save, few can do so,” the IDB said.
In order to encourage more workers in the region to save for their retirement, the Bank has launched the initiative that seeks innovative ways to encourage savings through interventions based on behavioural economics and the use of new technologies.
“The progressive aging of the population makes the lack of pension savings one of the main challenges that the region will face in the future,” said Carmen Pagés, chief of the Labour Market Division of the IDB. “The use of behavioral economics and technological solutions can help us to rethink the Welfare State for the 21st Century.”
Pagés added that the IDB wants to “generate reliable evidence, through rigorous impact evaluations, to improve public policies in the region”.
The project plans to carry out more than 15 interventions with financing from the MetLife Foundation, the IDB Group’s Multilateral Investment Fund, and the IDB Network for Pensions in Latin America and the Caribbean (PLAC Network). The goal is for 400,000 low-income workers to start saving for their old age.