Occupational Pensions and Interfirm Job Mobility in the European Union. Evidence from the ECHP Survey
Although the issue of portability of occupational pension rights has been high on the European Union (EU) policy agenda in the last two decades, no comparative studies have been produced to support the policy debate with empirical evidence. Using data from the European Community Household Panel survey we estimate the role of occupational pensions on individual job mobility choices for a sample of EU Member States - Denmark, Ireland, the Netherlands and the United Kingdom - where occupational pensions play a major role in the provision of retirement income. We model individual job mobility choices as driven by ex-ante evaluation of the expected benefits and costs from mobility. The latters include potential pension portability losses arising to workers covered by defined benefit plans. Within a switching regression econometric framework we control for potential selection bias due to unobservables simultaneously affecting prospective wages and job mobility choices. This allows us to predict counterfactual (unobserved) wages for both movers and stayers and to identify the expected wage differential as well as the mobility cost parameters in a structural probit equation. We find that, among the countries under study, pension covered workers are significantly less likely to move only in the United Kingdom, while pension portability losses do not generally act as a significant impediment to labour mobility. Although these results are consistent with the pension portability options quaranteed by defined contribution plans in Denmark and by industry wide and company defined benefits plans in the Netherlands, they provide somewhat surprising evidence for the United Kingdom and particularly for Ireland, where defined benefit pensions tipically have limited portability. Rather, the finding of positive wage premiums accruing to pension covered workers in the latter two countries, particularly in Ireland, is consistent with the view that individuals are less likely to leave “good” jobs.
|Date of creation:||Feb 2001|
|Contact details of provider:|| Postal: Via Real Collegio 30, 10024 Moncalieri (TO)|
Phone: 39 011 6705040
Fax: +39 011 6705042
Web page: http://www.cerp.carloalberto.org
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:crp:wpaper:05. 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: (Silvia Maero)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 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.