Friedberg, Leora, and Anthony Webb. 2005. "Retirement and the Evolution of Pension Structure." Journal of Human Resources 40(2): 281-308.

Defined benefit pension plans have become considerably less common since the early 1980s, while defined contribution plans have spread. Previous research showed that defined benefit plans, with sharp incentives encouraging retirement after a certain point, contributed to the striking decline in American retirement ages. In this paper we find that the absence of age-related incentives in defined contribution plans leads workers to retire almost two years later on average, compared to workers with defined benefit plans. Thus, the evolution of pension structure can help explain recent increases in the typical retirement age, after decades of decline.

Leora Friedberg is a professor of economics at the University of Virginia and a researcher at the National Bureau of Economic Research. Anthony Webb is a researcher at the International Longevity Center—USA. The authors thank Scott J. Adams, Hugo Benítez Silva, Courtney Coile, Vince Crawford, Daniel Dulitzky, Marjorie Flavin, Alan Gustman, Ted Groves, Jon Gruber, Jim Poterba, and participants of several seminars for very helpful comments. They are grateful to Vince Crawford, Cathy Liebowitz, and Bob Peticolas for enormous help with obtaining and/or explaining the HRS pension data. Information about how to obtain the restricted data from the Health and Retirement Study is available at http://hrsonline.isr.umich.edu/rda/. The authors would be happy to provide guidance about obtaining the data.