Incentive Effects of Pensions
Many different types of pension plans exist in American firms. The stipulations of plans vary dramatically, even among large firms, with respect to vesting, relationship of the pension to final salary, maximum and minimum years of service constraints, and maximum and minimum benefit levels. These provisions are examined to determine their effects on worker behavior.Specifically, the paper analyes which plans encourage or discourage appropriate worker responses in hours worked, turnover, human capital investment and effort. An attempt is made to explain the provisions in light of the findings.
|Date of creation:||May 1983|
|Date of revision:|
|Publication status:||published as Lazear, Edward P. "Incentive Effects of Pensions." Pension, Labor, and Individual Choice, edited by David A. Wise. Chicago: University of Chicago Press, (1985), pp. 253-282.|
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in: Financial Aspects of the United States Pension System, pages 57-90
National Bureau of Economic Research, Inc.
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0513, National Bureau of Economic Research, Inc.
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NBER Working Papers
0910, National Bureau of Economic Research, Inc.
- Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 84(3), pages 488-500, August.
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- Rothschild, Michael & Stiglitz, Joseph E, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, MIT Press, vol. 90(4), pages 630-49, November.
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