Volume 26, Number 4 (Fall) 1991
Luzadis, Rebecca A. and Olivia S. Mitchell. 1991. "Explaining Pension Dynamics." Journal of Human Resources 26(4):679-703.
Whether and how the labor market will adapt to anticipated changes in the workforce age distribution depends on how able companies are to induce desired turnover patterns among older and younger employees. This paper contends that companies can and will use pension plan provisions as powerful incentives to induce people to leave at later ages. A longitudinal file of collectively bargained pension plans gathered by the United States Bureau of Labor Statistics is examined empirically. We find dramatic increases in benefit levels, reductions in early, normal and deferred retirement ages, and declines in the age at which pension present values peak (with retirement after that age penalized). Several explanations for these observed pension outcomes are evaluated empirically. We believe that these findings indicate how employer-provided pensions can and will play an important role in helping companies induce desired turnover patterns as the workforce ages.
Rebecca A. Luzadis is an assistant professor of management at Miami University. Olivia S. Mitchell is a professor of labor economics at Cornell University and a researcher at the National Bureau of Economic Research. This research was funded by the Social Security Administration under Grant No. 10-P-98289-1, Section 702 of the Social Security Act, in conjunction with the National Bureau of Economic Research programs on Labor Studies and the Economics of Aging. Excellent computer programming was provided by Vivian Fields, and capable research assistantship by Michelle Ciurea, Angela Mikalauskas, Ed Montemayor, Amy Myers, and Silvana Pozzebon. The authors remain solely responsible for opinions expressed herein.
© 2002 by the Board of Regents of the University of Wisconsin System
US ISSN 0022-166X