IDEAS home Printed from https://ideas.repec.org/p/crr/issbrf/ibslp28.html
   My bibliography  Save this paper

Compensation Matters: The Case of Teachers

Author

Listed:
  • Alicia H. Munnell
  • Rebecca Cannon Fraenkel

Abstract

The 2008 financial crisis sharply reduced the assets and funded levels in state and local pension plans. he drop in funding means that state and local governments have to raise additional revenue to fill the gap. At the same time, the ensuing recession eroded state and local revenues and increased the demand for public services. In response, governments have looked to cut benefits to their workers in order to reduce pension costs. Since, in many cases, state laws prevent any reduction in benefits for current employees, much of the cost-cutting activity has been aimed at new employees. As discussed below, studies have shown that total compensation is roughly equal in the public and private sectors, so a reduction in pension benefits will make total compensation lower in the public sector than in the private sector. Economic theory suggests that lower compensation will reduce the quality of workers attracted to the public sector. To assess the impact that recent cuts to pension benefits may have on the public sector workforce, this brief examines how total compensation differences within the public sector affect the quality of newly hired teachers.

Suggested Citation

  • Alicia H. Munnell & Rebecca Cannon Fraenkel, 2013. "Compensation Matters: The Case of Teachers," Issues in Brief ibslp28, Center for Retirement Research.
  • Handle: RePEc:crr:issbrf:ibslp28
    as

    Download full text from publisher

    File URL: http://crr.bc.edu/briefs/compensation-matters-the-case-of-teachers/
    Download Restriction: no

    Citations

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


    Cited by:

    1. Martin F. Lueken & Michael Podgursky, 2016. "Determinants of Cashing Out: A Behavioral Analysis of Refund Claimants and Annuitants in the Illinois Teachers Retirement System," Working Papers 1605, Department of Economics, University of Missouri.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:crr:issbrf:ibslp28. 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: (Amy Grzybowski) or (Christopher F Baum). General contact details of provider: http://edirc.repec.org/data/crrbcus.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.

    We have no references for this item. You can help adding them by using 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.