What Mexico Can Teach Us about Social Security

With an aging population and many of its citizens without substantial personal savings, the United States—like many countries—faces a social-security crisis. Yet reforming the system is an enormous political challenge, and approaches such as privatization of the system face stiff resistance. For those who favor privatization, Mexico’s recent experience with social security offers valuable lessons for how to do it. Chicago Booth’s Chad Syverson explains that Mexico’s transition to privatization is a cautionary tale for how fees can spin out of control, eating into the returns of the workers enrolled in the program.