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Work now, pay later? An empirical analysis of the pension–pay trade off

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  • Haynes, Jonathan B.
  • Sessions, John G.

Abstract

We employ random effects panel data regression methodology to investigate the potential compensating differential between wages and pensions. Using data from the British Household Panel Survey (BHPS) and derived prospective pension variables as calculated by the Institute for Fiscal Studies (IFS), we find no evidence of a trade off and, indeed, some evidence of a small premium. Further analysis finds no significant differences in the results for public and private sector workers, even after controlling for sample selection bias.

Suggested Citation

  • Haynes, Jonathan B. & Sessions, John G., 2013. "Work now, pay later? An empirical analysis of the pension–pay trade off," Economic Modelling, Elsevier, vol. 30(C), pages 835-843.
  • Handle: RePEc:eee:ecmode:v:30:y:2013:i:c:p:835-843
    DOI: 10.1016/j.econmod.2012.09.045
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    Cited by:

    1. Platanakis, Emmanouil & Sutcliffe, Charles, 2016. "Pension scheme redesign and wealth redistribution between the members and sponsor: The USS rule change in October 2011," Insurance: Mathematics and Economics, Elsevier, vol. 69(C), pages 14-28.
    2. Maurizio Caserta & Livio Ferrante & Francesco Reito, 2020. "Who pays for workplace benefits?," Manchester School, University of Manchester, vol. 88(4), pages 556-574, July.

    More about this item

    Keywords

    Pensions; Compensating wage differentials;

    JEL classification:

    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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