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Teachers’ willingness to pay for retirement benefits: A national stated preferences experiment

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  • Fuchsman, Dillon
  • McGee, Josh B.
  • Zamarro, Gema

Abstract

Many states in the U.S. have recently made or are considering changes to their teacher retirement systems. However, little is known about how teachers value various elements of their retirement benefits versus other aspects of their jobs and compensation. To help alleviate this gap, we use a discrete choice stated preferences experiment embedded in a nationally representative survey of teachers to estimate their willingness-to-pay for various retirement plan characteristics and other non-salary job components. We find that, on average, early-career teachers are indifferent between a traditional pension and alternative retirement plan designs. In addition, we find that teachers have stronger preferences around their expected salary replacement in retirement and retirement age than plan type. We also find that teachers’ willingness-to-pay for traditional pension plans is less than their willingness-to-pay for many other elements of their compensation, including salary growth, health insurance coverage, and Social Security enrollment.

Suggested Citation

  • Fuchsman, Dillon & McGee, Josh B. & Zamarro, Gema, 2023. "Teachers’ willingness to pay for retirement benefits: A national stated preferences experiment," Economics of Education Review, Elsevier, vol. 92(C).
    • Handle: RePEc:eee:ecoedu:v:92:y:2023:i:c:s0272775722001224
    DOI: 10.1016/j.econedurev.2022.102349
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    Cited by:

    1. Dan Goldhaber & Cyrus Grout & Kristian L. Holden & Josh B. McGee, 2024. "Evidence on the Relationship between Pension-Driven Financial Incentives and Late-Career Attrition: Implications for Pension Reform," ILR Review, Cornell University, ILR School, vol. 77(2), pages 175-198, March.
    2. Fullard, Joshua, 2023. "Labour market expectations and occupational choice: evidence from teaching," ISER Working Paper Series 2023-01, Institute for Social and Economic Research.

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    More about this item

    Keywords

    Teacher pensions; Stated preferences; Discrete choice experiment;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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