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Teacher Pension Plan Incentives, Retirement Decisions, and Workforce Quality

Author

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  • Shawn Ni
  • Michael Podgursky
  • Xiqian Wang

Abstract

We analyze late-career teacher turnover induced by pension incentives. Using longitudinal data on Tennessee teachers, we find high-quality teachers less likely to retire conditional on age and experience. We estimate a structural model for retirement that allows high- and lower-quality teachers to have different work–retirement preferences and use it to simulate the effect of alternative pension plan designs. Enhancements to traditional plans accelerate teacher retirement and reduce average teacher quality, whereas defined contribution (DC) plans have the opposite effect. Under the current plan, targeted retention bonuses would delay retirement of high-quality teachers at relatively modest cost.

Suggested Citation

  • Shawn Ni & Michael Podgursky & Xiqian Wang, 2022. "Teacher Pension Plan Incentives, Retirement Decisions, and Workforce Quality," Journal of Human Resources, University of Wisconsin Press, vol. 57(1), pages 272-303.
    • Handle: RePEc:uwp:jhriss:v:57:y:2022:i:1:p:272-303
    Note: DOI: 10.3368/jhr.57.1.1218-9912R2
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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