IDEAS home Printed from https://ideas.repec.org/p/cte/werepe/we043612.html
   My bibliography  Save this paper

Occupationa pensions, wages and tenure wage profiles

Author

Listed:
  • Andrietti, Vincenzo
  • Patacchini, Eleonora

Abstract

Using data from the BHPS, we estimate the impact of occupational pensions on wages and on the tenure profile of wages of male private sector workers in the UK. According to the theoretical literature, occupational pensions participants should receive a premium at the beginning of their careers, when the financial quit disincentives stemming from defined benefit plans are less binding. Our empirical evidence is consistent with this prediction. We find that occupational pension participants earn a positive wage premium only at the beginning of the career. Once we account for the endogenous sorting of individuals into occupational pension schemes, the magnitude of the estimated premium decreases sharply and it looses statistical significance. Indeed, the wage premium appears to be completely explained by unobservable individual and job match heterogeneity.

Suggested Citation

  • Andrietti, Vincenzo & Patacchini, Eleonora, 2004. "Occupationa pensions, wages and tenure wage profiles," UC3M Working papers. Economics we043612, Universidad Carlos III de Madrid. Departamento de Economía.
    • Handle: RePEc:cte:werepe:we043612
    as

    Download full text from publisher

    File URL: https://e-archivo.uc3m.es/rest/api/core/bitstreams/6bd3c9a2-d52c-438e-ade4-b83875ee7ed9/content
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Richard Disney & Carl Emmerson, 2002. "Choice of pension scheme and job mobility in Britain," IFS Working Papers W02/09, Institute for Fiscal Studies.
    2. Dustmann, Christian & Pereira, Sonia C., 2005. "Wage Growth and Job Mobility in the U.K. and Germany," IZA Discussion Papers 1586, Institute of Labor Economics (IZA).
    3. Montgomery, Edward & Shaw, Kathryn & Benedict, Mary Ellen, 1992. "Pensions and Wages: An Hedonic Price Theory Approach," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(1), pages 111-128, February.
    4. Gustman, Alan L. & Steinmeier, Thomas L., 1993. "Pension portability and labor mobility : Evidence from the survey of income and program participation," Journal of Public Economics, Elsevier, vol. 50(3), pages 299-323, March.
    5. Steven G. Allen & Robert L. Clark & Ann A. McDermed, 1993. "Pensions, Bonding, and Lifetime Jobs," Journal of Human Resources, University of Wisconsin Press, vol. 28(3), pages 463-481.
    6. George A. Akerlof & Lawrence F. Katz, 1989. "Workers' Trust Funds and the Logic of Wage Profiles," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 104(3), pages 525-536.
    7. Griliches, Zvi & Hausman, Jerry A., 1986. "Errors in variables in panel data," Journal of Econometrics, Elsevier, vol. 31(1), pages 93-118, February.
    8. Joseph G. Altonji & Robert A. Shakotko, 1987. "Do Wages Rise with Job Seniority?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(3), pages 437-459.
    9. Richard A. Ippolito, 1994. "Pensions and Indenture Premia," Journal of Human Resources, University of Wisconsin Press, vol. 29(3), pages 795-812.
    10. Onorato Castellino & Elsa Fornero (ed.), 2003. "Pension Policy in an Integrating Europe," Books, Edward Elgar Publishing, number 2972.
    11. Finnie, R., 1993. "Tenure Experience, and Men's and Women's Wages: Panel Estimates from the National Longitudinal Survey of Youth," Papers 9305, Laval - Recherche en Politique Economique.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Haynes, Jonathan B. & Sessions, John G., 2013. "Work now, pay later? An empirical analysis of the pension–pay trade off," Economic Modelling, Elsevier, vol. 30(C), pages 835-843.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Leora Friedberg & Michael T. Owyang, 2004. "Explaining the evolution of pension structure and job tenure," Working Papers 2002-022, Federal Reserve Bank of St. Louis.
    2. Andrietti, Vincenzo, 2004. "Pension choices and job mobility in the UK," UC3M Working papers. Economics we043713, Universidad Carlos III de Madrid. Departamento de Economía.
    3. Haynes, Jonathan B. & Sessions, John G., 2013. "Work now, pay later? An empirical analysis of the pension–pay trade off," Economic Modelling, Elsevier, vol. 30(C), pages 835-843.
    4. Robert L. Clark & Joseph F. Quinn, 1999. "Effects of Pensions on Labor Markets and Retirement," Boston College Working Papers in Economics 431, Boston College Department of Economics.
    5. 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.
    6. 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.
    7. Birgitta Rabe, 2007. "Occupational Pensions, Wages, And Job Mobility In Germany," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(4), pages 531-552, September.
    8. Palacios, Robert, 2006. "Civil-service pension schemes around the world," MPRA Paper 14796, University Library of Munich, Germany.
    9. Robert Orlowski & Regina T. Riphahn, 2008. "The East German Wage Structure after Transition," SOEPpapers on Multidisciplinary Panel Data Research 148, DIW Berlin, The German Socio-Economic Panel (SOEP).
    10. Ruhm, Christopher J., 1996. "Do pensions increase the labor supply of older men?," Journal of Public Economics, Elsevier, vol. 59(2), pages 157-175, February.
    11. repec:eee:labchp:v:3:y:1999:i:pc:p:3261-3307 is not listed on IDEAS
    12. Parent, Daniel, 1999. "Wages and Mobility: The Impact of Employer-Provided Training," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 298-317, April.
    13. Gielen, A. C. & van Ours, J.C., 2006. "Why do Worker-Firm Matches Dissolve?," Other publications TiSEM 8c99a292-9f34-4ce8-8fd9-9, Tilburg University, School of Economics and Management.
    14. Ann P. Bartel & Nachum Sicherman, 1999. "Technological Change and Wages: An Interindustry Analysis," Journal of Political Economy, University of Chicago Press, vol. 107(2), pages 285-325, April.
    15. Wang, Ruqu & Weiss, Andrew, 1998. "Probation, layoffs, and wage-tenure profiles: A sorting explanation," Labour Economics, Elsevier, vol. 5(3), pages 359-383, September.
    16. repec:eee:labchp:v:3:y:1999:i:pb:p:2373-2437 is not listed on IDEAS
    17. Paul Hek & Daniel Vuuren, 2011. "Are older workers overpaid? A literature review," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 18(4), pages 436-460, August.
    18. Sundaram, Rangarajan K. & Yermack, David, 2006. "Pay Me Later: Inside Debt and Its Role in Managerial Compensation," SIFR Research Report Series 43, Institute for Financial Research.
    19. Daniel Parent, 1995. "Industry-Specific Capital and the Wage Profile: Evidence from the NLSY and the PSID," CIRANO Working Papers 95s-26, CIRANO.
    20. repec:umc:wpaper:1310 is not listed on IDEAS
    21. Vincenzo Andrietti & Vincent Hildebrand, 2001. "Pension Portability and Labour Mobility in the United States. New Evidence from the SIPP Data," CeRP Working Papers 10, Center for Research on Pensions and Welfare Policies, Turin (Italy).
    22. Andrietti, Vincenzo & Hildebrand, Vincent, 2004. "Evaluating pension portability reforms. the tax reform act of 1986 as a natural experiment," UC3M Working papers. Economics we045220, Universidad Carlos III de Madrid. Departamento de Economía.
    23. Roland A. Amann & Tobias J. Klein, 2012. "Returns to type or tenure?," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 175(1), pages 153-166, January.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cte:werepe:we043612. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ana Poveda (email available below). General contact details of provider: http://www.eco.uc3m.es/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.