Do public pension obligations affect state funding costs?
AbstractStates’ unfunded pension obligations to their current and retired employees have exploded in recent years to levels that are estimated to be between $750 billion and $4.4 trillion. In theory, this massive debt should have implications for states’ ability to meet their financial obligations and a measurable impact on funding costs. Yet, we find no evidence that municipal bond markets are pricing the risks to states’ fiscal health arising from these large obligations.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Cleveland in its series Working Paper with number 1301.
Date of creation: 2013
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-AGE-2013-03-23 (Economics of Ageing)
- NEP-ALL-2013-03-23 (All new papers)
- NEP-URE-2013-03-23 (Urban & Real Estate Economics)
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