Explaining Pension Dynamics
Whether and how the labor market will adapt to anticipated changes in the workforce age distribution depends on how able companies are to induce desired turnover patterns among older and younger employees. This paper contends that companies can and will use pension plan provisions as powerful incentives to induce people to remain on their jobs, and perhaps even more importantly to leave at later ages. A longitudinal file of collectively bargained pension plans gathered by the United States Bureau of Labor Statistics is examined empirically. We find dramatic increases in benefit levels, reductions in early, normal and deferred retirement ages, and declines in the age at which pension present values peak (with retirement after that age penalized). Several explanations for these observed pension outcomes are evaluated empirically. We believe that these findings indicate how employer-provided pensions can and will play an important role in helping companies induce desired turnover patterns as the workforce ages.
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References listed on IDEAS
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- Hutchens, Robert, 1986. "Delayed Payment Contracts and a Firm's Propensity to Hire Older Workers," Journal of Labor Economics, University of Chicago Press, vol. 4(4), pages 439-57, October.
- Steven G. Allen & Robert L. Clark & Daniel A. Sumner, 1984.
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"Pensions, The Option Value of Work, and Retirement,"
NBER Working Papers
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- Stock, James H & Wise, David A, 1990. "Pensions, the Option Value of Work, and Retirement," Econometrica, Econometric Society, vol. 58(5), pages 1151-80, September.
- Olivia S. Mitchell & Rebecca A. Luzadis, 1988. "Changes in Pension Incentives through Time," ILR Review, Cornell University, ILR School, vol. 42(1), pages 100-108, October.
- Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-84, December.
- Richard V. Burkhauser, 1979. "The Pension Acceptance Decision of Older Workers," Journal of Human Resources, University of Wisconsin Press, vol. 14(1), pages 63-75.
- repec:hoo:wpaper:e-88-28 is not listed on IDEAS
- Zvi Bodie & John B. Shoven, 1983. "Financial Aspects of the United States Pension System," NBER Books, National Bureau of Economic Research, Inc, number bodi83-1, September.
- Phillip B. Levine & Olivia S. Mitchell, 1988. "The Baby Boom's Legacy: Relative Wages in the 21st Century," NBER Working Papers 2501, National Bureau of Economic Research, Inc.
- 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.
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