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Pensions and Firm Performance

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  • Steven G. Allen
  • Robert L. Clark

Abstract

This paper examines how pension plans affect employee behavior and firm performance. Theoretically, the impact of pensions on firm performance cannot be predicted. Firms with pensions should have lower turnover rates and more efficient retirement decisions; their employees will be less likely to shirk. On the other hand, pension compensation is not very closely linked to worker performance and there is some risk that turnover may fall too much. The evidence indicates that although wages do not seem to fall with pension compensation, profit rates are not affected by pension coverage. This suggests that pension coverage is associated with higher productivity, a proposition that is supported by indirect evidence on pensions, turnover, and productivity but not by direct tests of how pension coverage and productivity are correlated.

Suggested Citation

  • Steven G. Allen & Robert L. Clark, 1987. "Pensions and Firm Performance," NBER Working Papers 2266, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:2266
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    References listed on IDEAS

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    Cited by:

    1. Olivia S. Mitchell, "undated". "Retirement Systems in Developed and Developing Countries: Institutional Features, Economic Effects, and Lessons for Economies in Transition," Pension Research Council Working Papers 94-3, Wharton School Pension Research Council, University of Pennsylvania.
    2. Lammers, Marloes & Bloemen, Hans & Hochguertel, Stefan, 2017. "Pension Rules and Labour Market Mobility," IZA Discussion Papers 10840, 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. 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. Raffaele Bruni, 1996. "The presence of occupational pension schemes within the overall pension scene," Transfer: European Review of Labour and Research, , vol. 2(4), pages 699-723, November.
    6. Bernheim, B. Douglas, 2002. "Taxation and saving," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 18, pages 1173-1249, Elsevier.
    7. Catriona Paisey & Nicholas J. Paisey, 2006. "And they all lived happily ever after?: Exploring the possibilities of mobilising the internet to promote a more enabling accounting for occupational pension schemes," Accounting, Auditing & Accountability Journal, Emerald Group Publishing, vol. 19(5), pages 719-758, September.
    8. Platanakis, Emmanouil & Sutcliffe, Charles, 2016. "Pension scheme redesign and wealth redistribution between the members and sponsor: The USS rule change in October 2011," Insurance: Mathematics and Economics, Elsevier, vol. 69(C), pages 14-28.
    9. Alan L. Gustman & Olivia S. Mitchell, 1990. "Pensions and the U.S. Labor Market," NBER Working Papers 3331, National Bureau of Economic Research, Inc.
    10. Douglas L. Kruse, 1993. "Does Profit Sharing Affect Productivity?," NBER Working Papers 4542, National Bureau of Economic Research, Inc.
    11. Mario Bossler, 2015. "The efficiency wage effect of employer provided occupational pensions," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-17, December.
    12. Alan L. Gustman & Thomas L. Steinmeier, 1987. "Pensions, Efficiency Wages, and Job Mobility," NBER Working Papers 2426, National Bureau of Economic Research, Inc.

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