contributions of a deceased husband, and thus, less likely to have a "learning" impact on the behavior of younger women. There is no evidence of a negative demonstration effect on contribution behavior from the amount of non-contributory, social assistance pensions received by household members. This may indicate that social assistance benefits for old age in Chile are set sufficiently low as to prevent moral hazard among those of working age.

Do individuals substitute pooling and saving in the formal system with analogous riskmitigating behavior outside the system? The expectation of care from children significantly lowers the likelihood of contribution to the pension system. The amount spent on children's education - a form of pooling as long as supporting children increases the likelihood of reciprocal support, for parents in their old age - lowers the likelihood of contribution to the system. Since contributions to the system up to the minimum eligibility threshold may be motivated by a desire to pool or to save, identifying pure savings substitutes requires controlling for those affiliates who have eamed the pooled benefit.

Do individuals reduce their contributions to the formal system in favor of saving outside the system, once the formal pooled benefit has been secured? Workers who have met the contributory requirements to qualify for the minimum pension guaranteed by the government - the reformed system's remaining pooling element against poverty in old age - are significantly less likely to continue making contributions. The likelihood of additional contributions beyond the eligibility threshold is lowered further the greater the rental value of respondents' homes. Rather than rely on the pension system as an instrument for further savings, respondents who cross the eligibility threshold for the formal pooled benefit may prefer to diversify their retirement portfolio by saving for retirement outside the system in the form of housing. This pattern of behavior becomes statistically significant at age 49 - well under the age when Chilean workers can take early retirement legally.

Finally, demand for cover from the pension system seems to be largely determined by workers' risk preferences. However, those with a greater tolerance for risk contribute, suggesting that there are retirement security investments in Chile that are perceived as relatively less risky than saving in the pension system. Housing could be one such investment. This last result could also indicate that what individuals and households in Chile are seeking from the mandated pension system, is a relatively greater degree of security, even if this comes in the form of the modest annuity guaranteed by the government.

A valid alternative explanation for these results, is that the minimum pension guaranteed by the govermment is set too high. Workers with lower life-time earnings would not be able to accumulate a balance at retirement that could purchase an annuity for an amount higher than the guaranteed benefit. For these workers, contribution up to the eligibility threshold may be a high-return investment option, while every additional contribution will be a pure tax (Cox-Edwards, 2000, Edwards and Edwards, 2000). Yermo (2001) uses contribution density and income data from the PRIESO survey to simulate likely accumulated savings at the age of retirement for the sample of respondents, using the parameters employed by Cox-Edwards (2000). He finds that 25% of the women and 5% 31