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Eastern European countries have been transitioning out of communism and some have followed the Latin American and European countries' path of changing from a public social security system, toward a system that includes private accounts. They have chosen mixed systems with private as well as government funded parts to also sustain the previous pay-as-you-go system where workers paid for those retired. This research uses panel data and regression analysis for the Eastern European countries to estimate the impact of using some form of private accounts, or the percentage of income paid toward private accounts, on economic growth of GDP per capita. The impact on economic growth is statistically highly significant throughout all regressions with a large positive impact on the percentage of economic growth of GDP per capita from allocating higher percentages of income toward private accounts.

The Effects of Private Social Security Accounts on Economic Growth in Eastern Europe