Working Paper: NBER ID: w0944
Authors: Edward P. Lazear
Abstract: 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.
Keywords: No keywords provided
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| pensions (H55) | labor mobility (J62) |
| pensions (H55) | early retirement (J26) |
| early retirement (J26) | labor mobility (J62) |
| severance pay (J65) | labor mobility (J62) |
| pension structure (H55) | labor mobility (J62) |
| pension values (H55) | retirement age (J26) |
| retirement age (J26) | labor mobility (J62) |