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Complementarity of Pensions and Training under Multiemployer Plans

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  • TERESA GHILARDUCCI
  • MICHAEL REICH

Abstract

We compare firm-optimizing and institutional models of labor contracts to investigate how different types of pension plans affect employee training. Unlike previous studies, we consider an expanded voice model of training and pension coverage in which worker and union preferences feed back on firm decisions, and we test for this bidirectional causality between pensions and training. A standard view is that firms provide pensions to optimize their training costs. However, when pension coverage is treated as endogenous in a two-stage least squares regression (the data are merged 1991 CPS samples), pensions have a negative effect on training. In contrast, when the pension is a defined-benefit, multiemployer plan, training and pensions are complements, consistent with both optimizing and institutional models.

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  • Teresa Ghilarducci & Michael Reich, 2001. "Complementarity of Pensions and Training under Multiemployer Plans," Journal of Labor Research, Transaction Publishers, vol. 22(3), pages 615-634, July.
  • Handle: RePEc:tra:jlabre:v:22:y:2001:i:3:p:615-634
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    Cited by:

    1. Kandice Kapinos, 2009. "On the Determinants of Defined Benefit Pension Plan Conversions," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 30(2), pages 149-167, June.
    2. Kandice Kapinos, 2011. "Changes in Firm Pension Policy: Trends Away from Traditional Defined Benefit Plans," Working Papers 11-36, Center for Economic Studies, U.S. Census Bureau.
    3. Kandice Kapinos, 2009. "On the Determinants of Defined Benefit Pension Plan Conversions," Journal of Labor Research, Springer, vol. 30(2), pages 149-167, June.

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