Pensions as Severance Pay
Earlier claims that pensions serve as severance pay are corroborated by a new data set drawn from the 1980 Banker's Trust corporate pension plan study. A model is developed that shows how pension values which vary with the age of retirement make both workers and firms better off by moving the equilibrium in the direction of a perfect-information, first-best optimum. This requires that pension values decline with the age of retirement beyond a certain point. Evidence from the 1975 and 1980 data sets supports this claim. To the extent that any significant change has occurred between 1975 and 1980, most important is that the ratio of early retirement pension value to normal retirement pension value has increased.
|Date of creation:||Jul 1982|
|Publication status:||published as Lazear, Edward P. "Pensions as Severance Pay." Financial Aspects of the U.S . Pension System, ed. by Zvi Bodie and John B. Shoven. Chicago: Universityof Chicago Press, (1984), pp. 57-85.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hall, Robert E & Lazear, Edward P, 1984.
"The Excess Sensitivity of Layoffs and Quits to Demand,"
Journal of Labor Economics,
University of Chicago Press, vol. 2(2), pages 233-257, April.
- Robert E. Hall & Edward P. Lazear, 1982. "The Excess Sensitivity of Layoffs and Quits to Demand," NBER Working Papers 0864, National Bureau of Economic Research, Inc.
- Richard V. Burkhauser & Joseph F. Quinn, 1983. "The Effect of Pension Plans on the Pattern of Life Cycle Compensation," NBER Chapters,in: The Measurement of Labor Cost, pages 395-420 National Bureau of Economic Research, Inc.
- Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-1284, December.
- Grossman, Sanford J & Hart, Oliver D, 1981. "Implicit Contracts, Moral Hazard, and Unemployment," American Economic Review, American Economic Association, vol. 71(2), pages 301-307, May.
- Gary S. Becker & George J. Stigler, 1974. "Law Enforcement, Malfeasance, and Compensation of Enforcers," The Journal of Legal Studies, University of Chicago Press, vol. 3(1), pages 1-18, January.
- Jerry R. Green, 1981. "Wage-Employment Contracts (Replaced by W0675)," NBER Working Papers 0623, National Bureau of Economic Research, Inc.
- Arnott, Richard J & Stiglitz, Joseph E, 1985. "Labor Turnover, Wage Structures, and Moral Hazard: The Inefficiency of Competitive Markets," Journal of Labor Economics, University of Chicago Press, vol. 3(4), pages 434-462, October.
- Jeremy I. Bulow, 1981. "Early Retirement Pension Benefits," NBER Working Papers 0654, National Bureau of Economic Research, Inc.
- Jerry R. Green & Charles M. Kahn, 1981. "Wage-Employment Contracts: Global Results," NBER Working Papers 0675, National Bureau of Economic Research, Inc. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:0944. 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: ()
If references are entirely missing, you can add them using this form.