Principal-Agent Problem with Minimum Performance Insurance: The Case of Mandatory Individual Pension Accounts

Borradores de Economia
Number: 
546
Published: 
Classification JEL: 
D86, D82, G23
Keywords: 
Human capital agglomeration, Social returns, Private returns, Externalities, Uncertainty, Fiscal policy

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A minimum performance insurance in the Principal-Agent problem is wealth reducing to the principal. This result points to further inefficiencies in mandatory individual Pension Funds' contracts, particularly the one established in the 1993's 100th Law in