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Pension type, tenure, and job mobility

Author

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  • HAVERSTICK, KELLY
  • MUNNELL, ALICIA H.
  • SANZENBACHER, GEOFFREY
  • SOTO, MAURICIO

Abstract

Over the last 25 years, the United States has seen a dramatic shift in the private sector away from defined benefit plans and towards defined contribution plans. While commentators constantly cite an increase in labor mobility as a major reason for the shift in the private sector from defined benefit to defined contribution plans, researchers to date have not been able to document any difference in mobility by pension type. This study argues that the inability to find such a relationship stems from ignoring the important role of job tenure. Using data from the Survey of Income and Program Participation (SIPP) and the Panel Study of Income Dynamics (PSID), the results of duration analyses that include the interaction of job tenure and pension type reveal that workers with between five and ten years of tenure at a firm are 23% more likely to leave a job with a defined contribution plan than with a defined benefit plan. This difference is consistent with differences in the timing of benefit level entitlement between the two types of plans.

Suggested Citation

  • Haverstick, Kelly & Munnell, Alicia H. & Sanzenbacher, Geoffrey & Soto, Mauricio, 2010. "Pension type, tenure, and job mobility," Journal of Pension Economics and Finance, Cambridge University Press, vol. 9(4), pages 609-625, October.
    • Handle: RePEc:cup:jpenef:v:9:y:2010:i:04:p:609-625_99
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    Cited by:

    1. Saime S KAYAM & Merih CELİKTOPUZ & Mehmet KORAY PARKIN, 2013. "Features That Influence The Exit Decision From The Private Pension System In Turkey," Journal of Advanced Studies in Finance, ASERS Publishing, vol. 4(2), pages 145-155.
    2. Adrjan, Pawel & Bell, Brian, 2018. "Pension shocks and wages," LSE Research Online Documents on Economics 88687, London School of Economics and Political Science, LSE Library.
    3. Ashok Thomas & Luca Spataro, 2016. "The Effects Of Pension Funds On Markets Performance: A Review," Journal of Economic Surveys, Wiley Blackwell, vol. 30(1), pages 1-33, February.
    4. Colleen Flaherty Manchester, 2019. "Retirement plan type and worker mobility," IZA World of Labor, Institute of Labor Economics (IZA), pages 461-461, October.
    5. Ashok Thomas & Luca Spataro, 2013. "Pension funds and Market Efficiency: A review," Discussion Papers 2013/164, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    6. Vincenzo Andrietti & Vincent A. Hildebrand, 2016. "Evaluating Pension Portability Reforms: The Tax Reform Act Of 1986 As A Natural Experiment Abstract," Economic Inquiry, Western Economic Association International, vol. 54(3), pages 1402-1424, July.
    7. Black, J. Stewart & van Esch, Patrick, 2021. "AI-enabled recruiting in the war for talent," Business Horizons, Elsevier, vol. 64(4), pages 513-524.

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