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Labor's Capital: The Economics and Politics of Private Pensions


  • Teresa Ghilarducci

    () (New School for Social Research)


Why are pension funds so large and benefits so small? This examination of the 120-year-old American system of privatized social insurance--often called, at 1.7 trillion dollars, the biggest lump of money in the world--reveals that the system fails to provide adequate retirement income security, its most prominent goal, and, in fact, its greatest influence is in supplying funds to U.S. capital markets. Linking market forces, historical movements, and social norms in the evolution of pensions, Ghilarducci's study is the first to focus on all major aspects of the system. Its trenchant analysis of the many sides of pensions and pension policy addresses questions of whom the system benefits, its direct and social costs, and the possibilities of reforms that would take into account the related problems of capital formation and retirement income. Ghilarducci describes the history of pension funds and the involvement of unions in bargaining. She takes up the "moral hazard" involved in the conflicting interests of corporations and their employees, tackling issues of information availability and inequality of pension distribution based on sex, race, and job hierarchy. And in two chapters, each focusing on corporate and union uses of pension funds, she covers such topics as tax breaks, the effect of corporate takeovers, the use of pensions to pay back debt, and the kinds of skimming that can occur despite government regulation of pension activities. Ghilarducci concludes by presenting an ideal pension plan that would benefit both employer and employee and by offering predictions about pension plans of the future. Teresa Ghilarducci is Associate Professor of Economics at the University of Notre Dame.

Suggested Citation

  • Teresa Ghilarducci, 1992. "Labor's Capital: The Economics and Politics of Private Pensions," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262071398, January.
  • Handle: RePEc:mtp:titles:0262071398

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    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Whitehouse, Edward, 2000. "Pension reform, financial literacy and public information: a case study of the United Kingdom," MPRA Paper 10323, University Library of Munich, Germany.
    2. Anil Verma & Johanna Weststar, 2011. "Token Presence or Substantive Participation? A Study of Labor Trustees on Pension boards," Journal of Labor Research, Springer, vol. 32(1), pages 39-60, March.
    3. repec:mes:jeciss:v:31:y:1997:i:2:p:517-525 is not listed on IDEAS
    4. Gerard Hughes & Brian Nolan, 1999. "Competitive and Segmented Labour Markets and Exclusion from Retirement Income," Papers WP108, Economic and Social Research Institute (ESRI).
    5. repec:mes:jeciss:v:28:y:1994:i:1:p:129-153 is not listed on IDEAS
    6. Gerard Hughes & Brian Nolan, 1993. "Pensions and the Structure of the Labour Market: Evidence from Irish Data," Papers WP044, Economic and Social Research Institute (ESRI).
    7. Codrina Rada, 2012. "The Economics of Pensions. Remarks on Growth, Distribution and Class Conflict," Working Paper Series, Department of Economics, University of Utah 2012_02, University of Utah, Department of Economics.
    8. repec:mes:jeciss:v:36:y:2002:i:2:p:401-406 is not listed on IDEAS
    9. palacios, Robert & Whitehouse, Edward, 2006. "Civil-service pension schemes around the world," Social Protection and Labor Policy and Technical Notes 90340, The World Bank.
    10. James Banks & Carl Emmerson, 2000. "Public and private pension spending: principles, practice and the need for reform," Fiscal Studies, Institute for Fiscal Studies, vol. 21(1), pages 1-63, March.
    11. repec:mes:jeciss:v:35:y:2001:i:4:p:805-823 is not listed on IDEAS
    12. William H. Lazonick & Mary O'Sullivan, 1997. "Corporate Governance and Corporate Employment: Is Prosperity Sustainable in the United States?," Economics Working Paper Archive wp_183, Levy Economics Institute.
    13. Armando Barrientos, 1998. "Supplementary pension coverage in Britain," Fiscal Studies, Institute for Fiscal Studies, vol. 19(4), pages 429-446, November.
    14. repec:eee:accfor:v:38:y:2014:i:1:p:18-37 is not listed on IDEAS
    15. William H. Lazonick & Mary O'Sullivan, "undated". "Investment in Innovation, Corporate Governance and Employment: Is Prosperity Sustainable in the United States?," Economics Public Policy Brief Archive ppb_37, Levy Economics Institute.
    16. repec:mes:postke:v:19:y:1996:i:2:p:155-170 is not listed on IDEAS
    17. repec:mes:jeciss:v:36:y:2002:i:2:p:349-356 is not listed on IDEAS
    18. Charles Whalen, 2008. "Understanding the Credit Crunch as a Minsky Moment," Challenge, Taylor & Francis Journals, vol. 51(1), pages 91-109.
    19. Sadowski, Dieter & Pull, Kerstin, 1995. "K├Ânnen betriebliche Sozialleistungen die staatliche Sozialpolitik entlasten?," Quint-Essenzen 45, University of Trier, Institute for Labour Law and Industrial Relations in the European Community (IAAEG).
    20. Yan Liang, 2011. "Money Manager Capitalism, Financialization and Structural Forces," Chapters,in: Heterodox Analysis of Financial Crisis and Reform, chapter 7 Edward Elgar Publishing.
    21. repec:mes:jeciss:v:32:y:1998:i:3:p:669-687 is not listed on IDEAS
    22. Hogler, Raymond L. & Hunt, Herbert III & Wilson, Paula A., 1996. "Accounting standards, health care, and retired American workers: An institutional critique," Accounting, Organizations and Society, Elsevier, vol. 21(5), pages 423-439, July.

    More about this item


    labor; pension; inequality;

    JEL classification:

    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions


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