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The Determinants of Occupational Pensions

Author

Listed:
  • Hernæs, Erik

    (The Ragnar Frisch Centre for Economic Research)

  • Piggott, John

    (The University of New South Wales and the Frisch Centre)

  • Zhang, Tao

    (The Ragnar Frisch Centre for Economic Research)

  • Strøm, Steinar

    (Dept. of Economics, University of Oslo)

Abstract

The decision by firms to offer an occupational pension is investigated with a unique linked employer-employee dataset, supplemented with detailed actuarial calculations of the cost to the firms of offering occupational pensions and constructed tax gains from pension contributions versus cash wage, driven by lower tax on wages than on pensions. The tax gains which can be shared between employers and employees by the degree of wage moderation, are clearly associated with the occurrence of an occupational pension plan. An occupational pension is associated with longer average tenure in the firm. Occupational pensions typically are found in large firms, and individual wage negotiations, a high degree of unionization and requirement of long training are all positively associated with an occupational pension. Hence, financial and productivity incentives are found to operate within a moderating institutional framework.

Suggested Citation

  • Hernæs, Erik & Piggott, John & Zhang, Tao & Strøm, Steinar, 2006. "The Determinants of Occupational Pensions," Memorandum 01/2006, Oslo University, Department of Economics.
    • Handle: RePEc:hhs:osloec:2006_001
    as

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    File URL: http://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2006/Memo-01-2006.pdf
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    References listed on IDEAS

    as
    1. Olivia S. Mitchell & Rebecca A. Luzadis, 1988. "Changes in Pension Incentives through Time," ILR Review, Cornell University, ILR School, vol. 42(1), pages 100-108, October.
    2. Leslie E. Papke, 1999. "Are 401(k) Plans Replacing Other Employer-Provided Pensions? Evidence from Panel Data," Journal of Human Resources, University of Wisconsin Press, vol. 34(2), pages 346-368.
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    Cited by:

    1. Bakken, Line Smart, 2006. "The Golden Age of Retirement," Memorandum 22/2006, Oslo University, Department of Economics.
    2. Hernæs, Erik & Zhu, Weizhen, 2009. "Pension Entitlements and Wealth Accumulation," Memorandum 12/2007, Oslo University, Department of Economics.

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    More about this item

    Keywords

    Occupational pensions; tax gains; tenure; linked employer-employee datasets;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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