IDEAS home Printed from https://ideas.repec.org/p/boc/bocoec/1023.html
   My bibliography  Save this paper

Do Public Sector Workers Increase Their Outside Savings in Response to Pension Cuts?

Author

Listed:
  • Laura D. Quinby

    (Center for Retirement Research at Boston College)

  • Geoffrey Sanzenbacher

    (Boston College)

Abstract

As state and local policymakers enact benefit cuts to reduce the cost of their pension systems, the life-cycle model suggests that workers will adjust by saving more on their own. But, whether workers actually respond to pension characteristics remains an open question. After all, income received far in the future may not be salient to young workers deciding how much of their earnings to consume in the present. To answer the question, this paper links the Survey of Income and Program Participation to the Public Plans Database and explores whether state and local workers consider the amount of their pension savings, the funded status of their plan, or their Social Security coverage when deciding whether to participate in a supplemental defined contribution (DC) plan.

Suggested Citation

  • Laura D. Quinby & Geoffrey Sanzenbacher, 2021. "Do Public Sector Workers Increase Their Outside Savings in Response to Pension Cuts?," Boston College Working Papers in Economics 1023, Boston College Department of Economics.
    • Handle: RePEc:boc:bocoec:1023
    as

    Download full text from publisher

    File URL: http://fmwww.bc.edu/EC-P/wp1023.pdf
    File Function: main text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gustman, Alan L. & Steinmeier, Thomas L. & Tabatabai, Nahid, 2010. "Pensions in the Health and Retirement Study," Economics Books, Harvard University Press, number 9780674048669, Spring.
    2. Sita Slavov & Devon Gorry & Aspen Gorry & Frank N. Caliendo, 2019. "Social Security and Saving: An Update," Public Finance Review, , vol. 47(2), pages 312-348, March.
    3. Robert L. Clark & Emma Hanson & Melinda S. Morrill & Aditi Pathak, 2015. "Supplemental Plan Offerings and Retirement Saving Choices: An Analysis of North Carolina School Districts," NBER Chapters, in: The Impact of Reforms of State Retirement Plans, pages 333-355, National Bureau of Economic Research, Inc.
    4. Peter van Santen, 2019. "Uncertain Pension Income and Household Saving," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 65(4), pages 908-929, December.
    5. David M. Blau, 2016. "Pensions, household saving, and welfare: A dynamic analysis of crowd out," Quantitative Economics, Econometric Society, vol. 7(1), pages 193-224, March.
    6. Clark, Robert L. & Hanson, Emma & Morrill, Melinda Sandler & Pathak, Aditi, 2016. "Supplemental plan offerings and retirement saving choices: an analysis of North Carolina school districts* ‡," Journal of Pension Economics and Finance, Cambridge University Press, vol. 15(3), pages 333-355, July.
    7. William G. Gale, 1998. "The Effects of Pensions on Household Wealth: A Reevaluation of Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 106(4), pages 706-723, August.
    8. Robert L. Clark & Denis Pelletier, 2019. "Impact of Defaults in Retirement Saving Plans: Public Employee Plans," NBER Working Papers 26234, National Bureau of Economic Research, Inc.
    9. Gustman, Alan L. & Steinmeier, Thomas L., 1999. "Effects of pensions on savings: analysis with data from the health and retirement study," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 50(1), pages 271-324, June.
    10. Matthew Hoops & Irina Stefanescu & Ivan Vidangos, 2015. "Defined-Contribution Pension Plans for State and Local Government Employees in the Financial Accounts of the United States," FEDS Notes 2015-04-20, Board of Governors of the Federal Reserve System (U.S.).
    11. Drew M. Anderson & J. Michael Collins, 2017. "Can Knowledge Empower Women to Save More for Retirement?," Working Papers, Center for Retirement Research at Boston College wp2017-12, Center for Retirement Research.
    12. A. J. Auerbach & M. Feldstein (ed.), 2002. "Handbook of Public Economics," Handbook of Public Economics, Elsevier, edition 1, volume 3, number 3.
    13. A. J. Auerbach & M. Feldstein (ed.), 2002. "Handbook of Public Economics," Handbook of Public Economics, Elsevier, edition 1, volume 4, number 4.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Torben M. Andersen & Joydeep Bhattacharya, 2021. "Why mandate young borrowers to contribute to their retirement accounts?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(1), pages 115-149, February.
    2. Erin Cottle Hunt & Frank N. Caliendo, 2022. "Social security and risk sharing: A survey of four decades of economic analysis," Journal of Economic Surveys, Wiley Blackwell, vol. 36(5), pages 1591-1609, December.
    3. Alessie, R.J.M. & Angelini, V. & van Santen, P.C., 2012. "Pension wealth and household savings in Europe," Research Report 12012-EEF, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    4. James MacGee & Jie Zhou, 2010. "Private Pensions, Retirement Wealth and Lifetime Earnings," University of Western Ontario, Economic Policy Research Institute Working Papers 20102, University of Western Ontario, Economic Policy Research Institute.
    5. Blau, David M., 2011. "Pensions, Household Saving, and Welfare: A Dynamic Analysis," IZA Discussion Papers 5554, Institute of Labor Economics (IZA).
    6. repec:dgr:rugsom:12012-eef is not listed on IDEAS
    7. Alessie, Rob & Angelini, Viola & van Santen, Peter, 2013. "Pension wealth and household savings in Europe: Evidence from SHARELIFE," European Economic Review, Elsevier, vol. 63(C), pages 308-328.
    8. Klaus Kaier & Christoph Müller, 2015. "New figures on unfunded public pension entitlements across Europe: concept, results and applications," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 42(4), pages 865-895, November.
    9. Clark, Robert L. & Mitchell, Olivia S., 2014. "How does retiree health insurance influence public sector employee saving?," Journal of Health Economics, Elsevier, vol. 38(C), pages 109-118.
    10. Derek Messacar, 2018. "The Effects of Vesting and Locking in Pension Assets on Participation in Employer-Sponsored Pension Plans," Journal of Labor Research, Springer, vol. 39(2), pages 178-200, June.
    11. Sita Slavov & Devon Gorry & Aspen Gorry & Frank N. Caliendo, 2019. "Social Security and Saving: An Update," Public Finance Review, , vol. 47(2), pages 312-348, March.
    12. Andreas Thiemann, 2016. "How Does Maternal Pension Wealth Affect Family Old-Age Savings in Germany?," Discussion Papers of DIW Berlin 1560, DIW Berlin, German Institute for Economic Research.
    13. Axel Börsch-Supan & Tabea Bucher-Koenen & Michela Coppola & Bettina Lamla, 2015. "Savings In Times Of Demographic Change: Lessons From The German Experience," Journal of Economic Surveys, Wiley Blackwell, vol. 29(4), pages 807-829, September.
    14. Peter van Santen, 2019. "Uncertain Pension Income and Household Saving," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 65(4), pages 908-929, December.
    15. Blundell, R. & French, E. & Tetlow, G., 2016. "Retirement Incentives and Labor Supply," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 457-566, Elsevier.
    16. Anna d’Addio & Muriel Roger & Frédérique Savignac, 2019. "Pensions and Household Savings: Cross-Country Heterogeneity in Europe," Working papers 738, Banque de France.
    17. Bairoliya, Neha, 2019. "Pension plan heterogeneity and retirement behavior," European Economic Review, Elsevier, vol. 116(C), pages 28-59.
    18. Ellalee, Haider & Alali, Walid Y., 2022. "A Welfare and Pass-Through Effects of Regulations within Imperfect Competition," MPRA Paper 116512, University Library of Munich, Germany.
    19. Tran, Chung & Wende, Sebastian, 2021. "On the marginal excess burden of taxation in an overlapping generations model," Journal of Macroeconomics, Elsevier, vol. 70(C).
    20. Nicoletta Berardi & Patrick Sevestre & Marine Tépaut & Alexandre Vigneron, 2016. "The impact of a ‘soda tax’ on prices: evidence from French micro data," Applied Economics, Taylor & Francis Journals, vol. 48(41), pages 3976-3994, September.
    21. Filistrucchi, L. & Ozbugday, F.C., 2012. "Mandatory Quality Disclosure and Quality Supply : Evidence from German Hospitals," Other publications TiSEM 680b0e3e-d3f5-4b91-9803-8, Tilburg University, School of Economics and Management.

    More about this item

    Keywords

    pension systems; benefits; savings;
    All these keywords.

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:boc:bocoec:1023. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christopher F Baum (email available below). General contact details of provider: https://edirc.repec.org/data/debocus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.