Pensions as Severance Pay
50 Pages Posted: 25 Jun 2004 Last revised: 1 Aug 2022
Date Written: July 1982
Abstract
Earlier claims that pensions serve as severance pay are corroborated by a new data set drawn from the 1980 Banker's Trust corporate pension plan study. A model is developed that shows how pension values which vary with the age of retirement make both workers and firms better off by moving the equilibrium in the direction of a perfect-information, first-best optimum. This requires that pension values decline with the age of retirement beyond a certain point. Evidence from the 1975 and 1980 data sets supports this claim. To the extent that any significant change has occurred between 1975 and 1980, most important is that the ratio of early retirement pension value to normal retirement pension value has increased.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Social Security and Retirement
By Courtney Coile and Jonathan Gruber
-
Social Security and Retirement
By Courtney Coile and Jonathan Gruber
-
Social Security and Retirement in the U.S
By Peter A. Diamond and Jonathan Gruber
-
Social Security Programs and Retirement Around the World: Micro Estimation
By Jonathan Gruber and David A. Wise
-
Pensions, the Option Value of Work, and Retirement
By James H. Stock and David A. Wise
-
By Jonathan Gruber and David A. Wise
-
Social Security Programs and Retirement Around the World: Introduction and Summary of Papers by..
By Jonathan Gruber and David A. Wise
-
The Social Security Early Entitlement Age in a Structural Model of Retirement and Wealth
-
Delays in Claiming Social Security Benefits
By Courtney Coile, Peter A. Diamond, ...