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Unions, Pensions, and Union Pension Funds

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  • Richard B. Freeman

Abstract

This paper examines the role of trade unions as determinants of: pension coverage, expenditures by firms for pensions; the provisions of pension plans; and pension fund investments. It also examines the impact of union pensions on the age-earnings profile of union workers. It has four basic findings:(1) Unions greatly increase pension coverage, and alter the determinants of coverage, in ways that go beyond the monopoly wage effects of unionism.(2) Unions alter the provisions of pension plans in ways that benefit senior workers and that equalize pensions among workers.(3) Estimates of the age-earnings profile of union workers are seriously flawed by failure to take account of the union impact on pensions, which generally enhance the earnings of the oldest groups.(4) Union pension funds can and do shun the stocks of nonunion firms without lowering the value of the portfolio. Investments in actual projects which take lower returns are, up to a point, justifiable in terms of the full economic benefit accruing to workers.

Suggested Citation

  • Richard B. Freeman, 1983. "Unions, Pensions, and Union Pension Funds," NBER Working Papers 1226, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:1226
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    Cited by:

    1. Lu, Yi & Tao, Zhigang & Wang, Yijiang, 2010. "Union effects on performance and employment relations: Evidence from China," China Economic Review, Elsevier, vol. 21(1), pages 202-210, March.
    2. David Weil, 2004. "Individual Rights and Collective Agents. The Role of Old and New Workplace Institutions in the Regulation of Labor Markets," NBER Chapters, in: Emerging Labor Market Institutions for the Twenty-First Century, pages 13-44, National Bureau of Economic Research, Inc.
    3. Steven G. Allen & Robert L. Clark, 1987. "Pensions and Firm Performance," NBER Working Papers 2266, National Bureau of Economic Research, Inc.
    4. Mohan, Nancy & Zhang, Ting, 2014. "An analysis of risk-taking behavior for public defined benefit pension plans," Journal of Banking & Finance, Elsevier, vol. 40(C), pages 403-419.
    5. Alan L. Gustman & Thomas L. Steinmeier, 1988. "An Analysis Of Pension Benefit Formulas, Pension Wealth And Incentives From Pensions," NBER Working Papers 2535, National Bureau of Economic Research, Inc.
    6. Steven G. Allen & Robert L. Clark & Daniel A. Sumner, 1986. "Postretirement Adjustments of Pension Benefits," Journal of Human Resources, University of Wisconsin Press, vol. 21(1), pages 118-137.
    7. Axel West Pedersen & Jon M Hippe & Anne Skevik Grødem & Ole Beier Sørensen, 2018. "Trade unions and the politics of occupational pensions in Denmark and Norway," Transfer: European Review of Labour and Research, , vol. 24(1), pages 109-122, February.
    8. Gustman, A.L. & Mitchell, O.S. & Steinmeier, T.L., 1993. "The Role of Pensions in the Labor Market," Papers 93-07, Cornell - Center for Advanced Human Resource Studies.
    9. Leora Friedberg & Michael Owyang, 2004. "Explaining the Evolution of Pension Structure and Job Tenure," NBER Working Papers 10714, National Bureau of Economic Research, Inc.
    10. Andrietti, Vincenzo, 2000. "Occupational pension coverage in the European Union. An empirical analysis," ISER Working Paper Series 2000-14, Institute for Social and Economic Research.
    11. Chang Hee Lee & Mingwei Liu, 2011. "Collective Bargaining in Transition: Measuring the Effects of Collective Voice in China," Chapters, in: Susan Hayter (ed.), The Role of Collective Bargaining in the Global Economy, chapter 8, Edward Elgar Publishing.
    12. Hogler, Raymond L. & Hunt, Herbert III & Wilson, Paula A., 1996. "Accounting standards, health care, and retired American workers: An institutional critique," Accounting, Organizations and Society, Elsevier, vol. 21(5), pages 423-439, July.
    13. Matthew Knepper, 2020. "From the Fringe to the Fore: Labor Unions and Employee Compensation," The Review of Economics and Statistics, MIT Press, vol. 102(1), pages 98-112, March.
    14. Alan L. Gustman & Olivia S. Mitchell, 1990. "Pensions and the U.S. Labor Market," NBER Working Papers 3331, National Bureau of Economic Research, Inc.
    15. David Weil, 2003. "Individual Rights and Collective Agents: The Role of Old and New Workplace Institutions in the Regulation of Labor Markets," NBER Working Papers 9565, National Bureau of Economic Research, Inc.
    16. Teresa Ghilarducci & Joelle Saad-Lessler, 2014. "Explaining the Decline in the OfFer Rate of Employer Retirement Plans Between 2001-2012," SCEPA working paper series. 2014-2, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
    17. An, Heng & Huang, Zhaodan & Zhang, Ting, 2013. "What determines corporate pension fund risk-taking strategy?," Journal of Banking & Finance, Elsevier, vol. 37(2), pages 597-613.
    18. Di Gialleonardo, Luca & Marè, Mauro & Motroni, Antonello & Porcelli, Francesco, 2016. "The impact of financial crisis on savings decisions: evidences from Italian pension funds," MPRA Paper 76066, University Library of Munich, Germany, revised Jul 2016.

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