Pension expectations as disincentives to job mobility

I address the measurement problem of the extent to which workers in an industry face disincentives to changing employment because of an interest in private pension benefits. I take an individual worker as the unit of analysis and represent job mobility over the work life by a time‐varying point process. I treat the various plan types (pension systems) in a unified way through a general reward function (accumulated benefit function). By merging the employment termination process with this function, I derive two other benefit functions to measure the pension expectations of a worker from current and future employments. I then use these functions to construct a loss function that trades off the benefit gains and losses faced by a worker in a pension system at the time of a potential job change. I apply the methodology developed in the paper to the United States pension system, using data from the 1989 Survey of Consumer Finances. © 1997 by John Wiley & Sons, Ltd.