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Incentive Effects of Pensions

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  • Edward P. Lazear

Abstract

Many different types of pension plans exist in American firms. The stipulations of plans vary dramatically, even among large firms, with respect to vesting, relationship of the pension to final salary, maximum and minimum years of service constraints, and maximum and minimum benefit levels. These provisions are examined to determine their effects on worker behavior.Specifically, the paper analyes which plans encourage or discourage appropriate worker responses in hours worked, turnover, human capital investment and effort. An attempt is made to explain the provisions in light of the findings.

Suggested Citation

  • Edward P. Lazear, 1983. "Incentive Effects of Pensions," NBER Working Papers 1126, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:1126
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    References listed on IDEAS

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    1. Jeremy I. Bulow, 1979. "Analysis of Pension Funding Under Erisa," NBER Working Papers 0402, National Bureau of Economic Research, Inc.
    2. Edward P. Lazear, 1983. "Pensions as Severance Pay," NBER Chapters, in: Financial Aspects of the United States Pension System, pages 57-90, National Bureau of Economic Research, Inc.
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    13. Edward P. Lazear, 1982. "Severance Pay, Pensions, and Efficient Mobility," NBER Working Papers 0854, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Olivia S. Mitchell, 1991. "Trends in Pension Benefit Formulas and Retirement Provisions," NBER Working Papers 3744, National Bureau of Economic Research, Inc.
    2. Steven G. Allen & Robert L. Clark, 1987. "Pensions and Firm Performance," NBER Working Papers 2266, National Bureau of Economic Research, Inc.
    3. Alicia H. Munnell & Steven A. Sass, 2007. "The Labor Supply of Older Americans," Working Papers, Center for Retirement Research at Boston College wp2007-12, Center for Retirement Research, revised Jun 2007.
    4. James M. Poterba & Steven F. Venti, 2004. "The Transition to Personal Accounts and Increasing Retirement Wealth: Macro- and Microevidence," NBER Chapters, in: Perspectives on the Economics of Aging, pages 17-80, National Bureau of Economic Research, Inc.
    5. Shawn Ni & Michael Podgursky, 2016. "How Teachers Respond to Pension System Incentives: New Estimates and Policy Applications," Journal of Labor Economics, University of Chicago Press, vol. 34(4), pages 1075-1104.
    6. palacios, Robert & Whitehouse, Edward, 2006. "Civil-service pension schemes around the world," Social Protection Discussion Papers and Notes 90340, The World Bank.
    7. R. Glenn Hubbard, 1987. "Uncertain Lifetimes, Pensions, and Individual Saving," NBER Chapters, in: Issues in Pension Economics, pages 175-210, National Bureau of Economic Research, Inc.
    8. Herman B. Leonard, 1987. "Investing in the Defense Work Force: The Debt and Structure of Military Pensions," NBER Chapters, in: Public Sector Payrolls, pages 47-78, National Bureau of Economic Research, Inc.
    9. Juan F. Jimeno, "undated". "Incentivos y desigualdad en el sistema español de pensiones contributivas de jubilación," Working Papers 2002-13, FEDEA.
    10. Anna Cristina d'Addio & Maria Chiara Cavalleri, 2015. "Labour Mobility and the Portability of Social Rights in the EU," CESifo Economic Studies, CESifo, vol. 61(2), pages 346-376.
    11. Bender, Keith A., 2009. "How are pension integration and pension benefits related?," The Quarterly Review of Economics and Finance, Elsevier, vol. 49(1), pages 26-41, February.
    12. Johnson, Richard W., 1997. "Pension Underfunding and Liberal Retirement Benefits Among State and Local Government Workers," National Tax Journal, National Tax Association, vol. 50(1), pages 113-42, March.
    13. Chen, Xuanjuan & Yao, Tong & Yu, Tong & Zhang, Ting, 2014. "Learning and incentive: A study on analyst response to pension underfunding," Journal of Banking & Finance, Elsevier, vol. 45(C), pages 26-42.
    14. Kauffman, Kyle D. & Cribari-Neto, Francisco, 1995. "To pay or not to pay: Positive incentives as a calibrating device in the white indenture system," The Quarterly Review of Economics and Finance, Elsevier, vol. 35(3), pages 257-269.
    15. Johnson, Richard W., 1997. "Pension Underfunding and Liberal Retirement Benefits Among State and Local Government Workers," National Tax Journal, National Tax Association;National Tax Journal, vol. 50(1), pages 113-142, March.
    16. Danzer, Alexander M., 2010. "Retirement Responses to a Generous Pension Reform: Evidence from a Natural Experiment in Eastern Europe," IZA Discussion Papers 4726, Institute of Labor Economics (IZA).

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