Pension withdrawals shrank wealth at the bottom of the distribution. While some repaid debt, their pension wealth sharply declined. Withdrawals were regressive: lower-income individuals drained substantial portions of their savings—sometimes over 50%—reflecting policy impacts on wealth inequality.

Real asset gains benefited all, but predominantly middle-income households, given their portfolio composition. Pension withdrawals disproportionately hit lower-middle percentiles. Despite rising house prices benefiting the middle class, pension asset liquidation significantly impacted the poorest.

The top 10% owns roughly two-thirds of Chile's wealth, while the richest 1% alone holds nearly 40%. Although massive, inequality slightly declined since 2016.

Chile’s private wealth soared to over 3x GDP between 2007 and 2021, driven by housing appreciation, especially after 2016's real estate tax reform. Real assets led growth, overshadowing financial assets and pension funds.

Check out our new paper. We explore how housing booms and pension withdrawals reshaped wealth inequality from 2007-2021 in Chile. A story of macroeconomic shifts and extreme inequality.