The Incentive Effects of Private Pension Plans
The proportion of workers covered by pensions has increased very substantially over the past two or three decades, and in particular the number of older workers with pensions continues to increase. During the same period,and especially in the past decade, the labor force participation of older workers has declined dramatically. These two trends may well be related. This paper examines the incentive effects of private pensions. We find that the provisions of pension plans provide very substantial incentives to terminate work at the current job after the age of early retirement and even greater incentives to leave after the age of normal retirement. It is not unusual for the reduction in pension 'benefit accrual after these retirement ages to equal the equivalent of a 30 percent reduction in wage earnings. In addition to a potentially large impact on labor force participation of older workers, pension plan provisions are likely to have important effects on labor mobility of younger workers.
|Date of creation:||Dec 1984|
|Publication status:||published as Kotlikoff, Laurence and David A. Wise. "The Incentive Effects of Private Pension Plans," Issues in Pension Economics, ed. Z. Bodie, J.B. Shoven, D.A . Wise, Chicago: UCP, 1987. Pp. 283-336.|
|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
References listed on IDEAS
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.:
- Jeremy I. Bulow, 1979. "Analysis of Pension Funding Under Erisa," NBER Working Papers 0402, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:1510. 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.