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Which Teachers Choose a Defined Contribution Pension Plan? Evidence from the Florida Retirement System

Author

Listed:
  • Matthew M. Chingos

    (Brown Center on Education Policy, Brookings Institution)

  • Martin R. West

    (Harvard Graduate School of Education)

Abstract

Since 2002, public school teachers in Florida have been permitted to choose between a defined benefit (DB) and a defined contribution (DC) retirement plan. We exploit this unique policy environment to study new teachers’ revealed preferences over pension plan structures. Roughly 30 percent of teachers hired between 2003 and 2008 selected the DC plan, despite the fact that teachers not actively deciding within six months were defaulted into the DB plan. The share choosing the DC plan was higher among teachers with advanced degrees, math and science teachers, and teachers in charter schools. It was lower among special education teachers and especially among black and Hispanic teachers. There was only a slight relationship between plan choice and teacher value added to student achievement, with teachers in the bottom value-added quartile roughly 2 percentage points less likely to choose the DC option. © 2015 Association for Education Finance and Policy

Suggested Citation

  • Matthew M. Chingos & Martin R. West, 2015. "Which Teachers Choose a Defined Contribution Pension Plan? Evidence from the Florida Retirement System," Education Finance and Policy, MIT Press, vol. 10(2), pages 193-222, March.
    • Handle: RePEc:tpr:edfpol:v:10:y:2015:i:2:p:193-222
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    References listed on IDEAS

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    Cited by:

    1. Fuchsman, Dillon & McGee, Josh B. & Zamarro, Gema, 2023. "Teachers’ willingness to pay for retirement benefits: A national stated preferences experiment," Economics of Education Review, Elsevier, vol. 92(C).
    2. Dongwoo Kim & Cory Koedel & Wei Kong & Shawn Ni & Michael Podgursky & Weiwei Wu, 2021. "Pensions and Late-Career Teacher Retention," Education Finance and Policy, MIT Press, vol. 16(1), pages 42-65, Winter.
    3. Robert L. Clark & Aditi Pathak & Denis Pelletier, 2018. "Supplemental Retirement Savings Plans in the Public Sector: Participation and Contribution Decisions by School Personnel," Journal of Labor Research, Springer, vol. 39(4), pages 383-404, December.
    4. Kim, Dongwoo & Koedel, Cory & Xiang, P. Brett, 2021. "The trade-off between pension costs and salary expenditures in the public sector," Journal of Pension Economics and Finance, Cambridge University Press, vol. 20(1), pages 151-168, January.
    5. Ben Backes & Ben Backes & Dan Goldhaberb & Cyrus Grout & Cory Koedel & Shawn Ni & Michael Podgursky & P. Brett Xiang & Zeyu Xu, 2015. "Benefit or Burden? On the Intergenerational Inequity of Teacher Pension Plans," Working Papers 1517, Department of Economics, University of Missouri, revised Apr 2016.

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    More about this item

    Keywords

    public school; teacher; Florida; retirement plan; definted benefit; defined contribution;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J00 - Labor and Demographic Economics - - General - - - General
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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