Pension Reform And Financial Market Development Nexus: Evidence From Nigeria

It is generally assumed that Chilean type of pension reform helps in developing the financial market wherever the reform is adopted. However, this assertion is not clear cut especially in developing areas faced with problems of underdevelopment. Using the Error Correction Model (ECM) approach this study examines if pension reform advances the development of financial market in Nigeria. Time series data were compiled and a functional relationship was established using the OLS technique. Statistical significance of the error correction term confirmed the existence of an equilibrium relationship among the variables. The performance analysis of all the variables indicated that the reform period generates long-term contractual savings and stimulates the development of securities market.