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.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
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- Roger H. Gordon & Alan S. Blinder, 1980.
"Market Wages, Reservation Wages, and Retirement Decisions,"
NBER Working Papers
0513, National Bureau of Economic Research, Inc.
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- Robert C. Merton, 1983.
"On Consumption Indexed Public Pension Plans,"
in: Financial Aspects of the United States Pension System, pages 259-290
National Bureau of Economic Research, Inc.
- George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
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- Edward P. Lazear, 1983.
"Pensions as Severance Pay,"
in: Financial Aspects of the United States Pension System, pages 57-90
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.
- Michael Rothschild & Joseph Stiglitz, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, Oxford University Press, vol. 90(4), pages 629-649.
- Lazear, Edward P, 1981. "Agency, Earnings Profiles, Productivity, and Hours Restrictions," American Economic Review, American Economic Association, vol. 71(4), pages 606-20, September.
- Joanne Salop & Steven Salop, 1976. "Self-Selection and Turnover in the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 90(4), pages 619-627.
- Irwin Tepper, 1981. "Taxation and Corporate Pension Policy," NBER Working Papers 0661, National Bureau of Economic Research, Inc.
- Edward P. Lazear, 1982. "Severance Pay, Pensions, and Efficient Mobility," NBER Working Papers 0854, National Bureau of Economic Research, Inc.
- Joanne Salop & Steven C. Salop, 1976. "Self-selection and turnover in the labor market," Special Studies Papers 80, Board of Governors of the Federal Reserve System (U.S.).
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