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Do deferred benefit cuts for current employees increase separation?

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  • Quinby, Laura D.
  • Wettstein, Gal

Abstract

This study examines whether deferred benefit cuts increase worker separation. The analysis utilizes a 2005 reform to the Employees’ Retirement System of Rhode Island (ERSRI) that reduced benefits for ERSRI members who had not vested by 2005, and did not affect high-tenure ERSRI members and municipal government employees. A triple-differences research design yields an elasticity of employer-specific labor supply with respect to deferred benefits of 0.28. Although state employees were more sensitive to benefit cuts than teachers, low elasticities for both groups suggest that the labor market for public employees is not highly competitive.

Suggested Citation

  • Quinby, Laura D. & Wettstein, Gal, 2021. "Do deferred benefit cuts for current employees increase separation?," Labour Economics, Elsevier, vol. 73(C).
    • Handle: RePEc:eee:labeco:v:73:y:2021:i:c:s0927537121001160
    DOI: 10.1016/j.labeco.2021.102081
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