Postretirement Adjustments of Pension Benefits
During the 1970s, defined benefit pension plans increased their liabilities by giving benefit increases to persons no longer working even though almost none of the plans were required to do so by any legally enforceable contract. Our model of these adjustments has workers and firms agreeing to implicit contracts under which postretirement increases in benefits are purchased by workers through lower wages or initial benefits. The major empirical findings are that compensating differentials exist in final salary and initial pension benefits, that large pension plans and collectively bargained plans provide larger post-retirement benefit increases, and that benefit increases are larger in percentage terms for those who have been retired the longest and for those with the most years of service.
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- Duncan, Greg J & Holmlund, Bertil, 1983.
"Was Adam Smith Right after All? Another Test of the Theory of Compensating Wage Differentials,"
Journal of Labor Economics,
University of Chicago Press, vol. 1(4), pages 366-379, October.
- Duncan, Greg J. & Holmlund, Bertil, 1983. "Was Adam Smith Right, After All? Another Test of the Theory of Compensating Wage Differentials," Working Paper Series 93, Research Institute of Industrial Economics.
- Burt S. Barnow & Ronald G. Ehrenberg, 1979. "The Costs of Defined Benefit Pension Plans and Firm Adjustments," The Quarterly Journal of Economics, Oxford University Press, vol. 93(4), pages 523-540.
- Richard B. Freeman, 1985. "Unions, Pensions, and Union Pension Funds," NBER Chapters,in: Pensions, Labor, and Individual Choice, pages 89-122 National Bureau of Economic Research, Inc.
- Richard B. Freeman, 1983. "Unions, Pensions, and Union Pension Funds," NBER Working Papers 1226, National Bureau of Economic Research, Inc.
- Martin Feldstein, 1983. "Should Private Pensions Be Indexed?," NBER Chapters,in: Financial Aspects of the United States Pension System, pages 211-230 National Bureau of Economic Research, Inc.
- Martin Feldstein, 1981. "Should Private Pensions Be Indexed?," NBER Working Papers 0787, National Bureau of Economic Research, Inc.
- Ronald G. Ehrenberg, 1980. "Retirement System Characteristics and Compensating Wage Differentials in the Public Sector," ILR Review, Cornell University, ILR School, vol. 33(4), pages 470-483, July.
- Olivia S. Mitchell & Emily S. Andrews, 1981. "Scale Economies in Private Multi-Employer Pension Systems," ILR Review, Cornell University, ILR School, vol. 34(4), pages 522-530, July.
- Steven G. Allen & Robert L. Clark, 1985. "Unions, Pension Wealth, and Age-Compensation Profiles," NBER Working Papers 1677, National Bureau of Economic Research, Inc. Full references (including those not matched with items on IDEAS)
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