IDEAS home Printed from https://ideas.repec.org/p/cdl/indrel/qt2xq878qt.html
   My bibliography  Save this paper

Training and Pensions: Substitutes or Complements?

Author

Listed:
  • Ghilarducci, Teresa
  • Reich, Michael

Abstract

We compare firm-optimizing and institutional models of labor contracts to investigate how certain types of pension plans affect training. Unlike previous studies, we consider an expanded voice model of training and pension coverage in which worker and union preferences feed back upon firm decisions and we test for this bi-directional causality between pensions and training. The data consist of merged 1991 CPS samples, using the January training supplement and the March and April files, which contain information on pension coverage and union membership. When pension coverage is treated as endogenous in a two-stage least squares regression, pensions have a negative effect upon training, and they can be viewed as substitutes. This finding is inconsistent with the standard view that firms optimize training expenditures by providing pensions. In contrast, when pension coverage is in a defined benefit multiemployer plan, training and pensions are complements, consistent with both optimizing and institutional models.

Suggested Citation

  • Ghilarducci, Teresa & Reich, Michael, 1998. "Training and Pensions: Substitutes or Complements?," Institute for Research on Labor and Employment, Working Paper Series qt2xq878qt, Institute of Industrial Relations, UC Berkeley.
  • Handle: RePEc:cdl:indrel:qt2xq878qt
    as

    Download full text from publisher

    File URL: http://www.escholarship.org/uc/item/2xq878qt.pdf;origin=repeccitec
    Download Restriction: no

    References listed on IDEAS

    as
    1. Sandra E. Black & Lisa M. Lynch, 2001. "How To Compete: The Impact Of Workplace Practices And Information Technology On Productivity," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 434-445, August.
    2. Valletta, Robert G, 1999. "Declining Job Security," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 170-197, October.
    3. Alan L. Gustman & Olivia S. Mitchell & Thomas L. Steinmeier, 1994. "The Role of Pensions in the Labor Market: A Survey of the Literature," ILR Review, Cornell University, ILR School, vol. 47(3), pages 417-438, April.
    4. Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-1284, December.
    5. Alan S. Blinder, 1982. "Private Pensions and Public Pensions: Theory and Fact," NBER Working Papers 0902, National Bureau of Economic Research, Inc.
    6. K. Newey, Whitney, 1985. "Generalized method of moments specification testing," Journal of Econometrics, Elsevier, vol. 29(3), pages 229-256, September.
    7. Richard B. Freeman, 1981. "The Effect of Unionism on Fringe Benefits," ILR Review, Cornell University, ILR School, vol. 34(4), pages 489-509, July.
    8. William E. Even & David A. MacPherson, 1996. "Employer Size and Labor Turnover: The Role of Pensions," ILR Review, Cornell University, ILR School, vol. 49(4), pages 707-728, July.
    9. Johnson, Richard W, 1996. "The Impact of Human Capital Investments on Pension Benefits," Journal of Labor Economics, University of Chicago Press, vol. 14(3), pages 520-554, July.
    10. Walter Y. Oi, 1962. "Labor as a Quasi-Fixed Factor," Journal of Political Economy, University of Chicago Press, vol. 70, pages 538-538.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cdl:indrel:qt2xq878qt. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lisa Schiff). General contact details of provider: http://edirc.repec.org/data/irucbus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.