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Labour Market Effects of Defined Contribution Plans: An International Survey


  • John A. Turner

    () (Public Policy Institute, AARP)


Because of the apparent simplicity of defined contribution plans, they have until recently received relatively little analysis by economists. The presumption that defined contribution plans are non-distortionary is stronger for voluntary than mandatory plans because with voluntary plans workers have the choice to not work for employers that offer them. This article argues that mandatory defined contribution plans may be structured in ways that cause them to affect worker and employer behaviour by affecting aspects of labour supply and demand. For example, any mandatory program that attempts to increase workers' retirement savings may change their labour supply behaviour, both because individuals act to minimise the consequences of the program and because of the effects of the workers' greater retirement savings, if the program succeeds in that regard.

Suggested Citation

  • John A. Turner, 2000. "Labour Market Effects of Defined Contribution Plans: An International Survey," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 4(3), pages 224-231, September.
  • Handle: RePEc:ozl:journl:v:4:y:2001:i:3:p:224-231

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    References listed on IDEAS

    1. Peat, Maurice & Stevenson, Max, 1996. "Asymmetry in the business cycle: Evidence from the Australian labour market," Journal of Economic Behavior & Organization, Elsevier, vol. 30(3), pages 353-368, September.
    2. Gerard A. Pfann & Franz C. Palm, 1993. "Asymmetric Adjustment Costs in Non-linear Labour Demand Models for the Netherlands and U.K. Manufacturing Sectors," Review of Economic Studies, Oxford University Press, vol. 60(2), pages 397-412.
    3. Terasvirta, T & Anderson, H M, 1992. "Characterizing Nonlinearities in Business Cycles Using Smooth Transition Autoregressive Models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 7(S), pages 119-136, Suppl. De.
    4. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
    5. Rothman, Philip, 1991. "Further evidence on the asymmetric behavior of unemployment rates over the business cycle," Journal of Macroeconomics, Elsevier, vol. 13(2), pages 291-298.
    6. Skalin, Joakim & Ter svirta, Timo, 2002. "Modeling Asymmetries And Moving Equilibria In Unemployment Rates," Macroeconomic Dynamics, Cambridge University Press, vol. 6(02), pages 202-241, April.
    7. Burgess, Simon M, 1988. "Employment Adjustment in UK Manufacturing," Economic Journal, Royal Economic Society, vol. 98(389), pages 81-103, March.
    8. Wesley Clair Mitchell, 1927. "Business Cycles: The Problem and Its Setting," NBER Books, National Bureau of Economic Research, Inc, number mitc27-1, January.
    9. Philip Rothman, 1998. "Forecasting Asymmetric Unemployment Rates," The Review of Economics and Statistics, MIT Press, vol. 80(1), pages 164-168, February.
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    More about this item


    Nonwage Labor Costs and Benefits; Private Pensions (Fringe Benefits; Cost of Social Security; Costs of Hiring and Firing) Retirement; Retirement Policies Time Allocation and Labor Supply (Hours of Work; Part-Time Employment; Employment; Work Sharing; Absenteeism);

    JEL classification:

    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply


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