dealing with household composition, income and labor market activity, the survey asked for respondents' opinions of the reformed pension system, their preferences for alternative retirement security strategies, their access to credit, Berceptions of their own mortality, income shocks and contingent risk-coping strategies. A list of the variables constructed from the PRIESO for the present analysis and their definition, is provided in Table 3 (in alphabetical order). In Table 4, I have categorized those variables related to demand for cover under the current system by their instrument-type: fornal and informal pooling, saving, and prevention.<sup>3 3</sup> Variables controlling for factors affecting individuals' access to the pension system - discussed in Packard, et al (2001)- are shown in the shaded column of Table 4.

Among the sample of workers in Santiago who are affiliated to the pension system, only 62% were making contributions at the time of the survey, approximately the same level as found by Edwards and Edwards (2000) in 1998. Among working men, 64% were contributing. Only 58% of working women made contributions, while among women of working age who were neither working nor searching for a job, 42% received some cover from the system through the contributions of a spouse, leaving 58% without formal coverage. However, contribution to the system at any point in time can underestimate the share of workers who are actually covered, in that the measure does not take account of past contributions nor of disability and life insurance benefits that extend for a period after a worker has stopped contributing.

In an analysis of the coverage of an old-age income security system - especially demand for cover - the only choice variable is an individual's period of contributions to the system as a share of their working lives - their _"contribution density"_ (CONDEN in Table 3). This measure has long been unavailable to researchers in Chile and in other developing countries.<sup>3 4</sup> 35 Respondents to the PRIESO were asked the month and year 32 Details on the sampling techniques used, as well as excerpts from the field report are provided in Appendix One. The full questionnaire is reproduced in English as Appendix Two.

33 Readers will note that there are few if any available variables included to act as proxies for formal pooling outside the pension system, informal saving and informal prevention. While there are several questions in the PRIESO questionnaire (see Appendix Two) to elicit data on these instruments, variables constructed from these data were excluded from the empirical analysis mainly because there were too few observations. There is also no proxy for **_p 0 ,_** the probability of the bad state that is observed. Although, objective life expectancy could act as an acceptable proxy, this is a function of age, making it difficult to unravel the effects on contribution of the observable probability of poverty from the effects of age. Furthermore, due to an element of ambiguity about what is purely saving and what is purely prevention, inherited from the Ehrlich and Becker framework (see quote in footnote 12), it is difficult to definitively categorize variables such as years of education (with both "prevention" and "access" elements). I discuss how this ambiguity is reflected in the interpretation of the results in the next section.

34 Ironically, while a worker's density of contributions is relatively more important in assessing whether they are covered in a defined contribution system than under a purely PAYGO regime, the private and decentralized structure of the reformed system in Chile has made data on contribution history unavailable to the system's regulators. Only recently have the authorities made an official request to the private fund managers for the contribution history of a sample of affiliates in order to begin assessing whether the system will provide adequate retirement benefits.

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