Pension type, tenure, and job mobility*

Kelly Haverstick, Alicia Munnell, Geoffrey Sanzenbacher and Mauricio Soto ()

Journal of Pension Economics and Finance, 2010, vol. 9, issue 4, 609-625

Abstract: Over the last 25 years, the United States has seen a dramatic shift in the private sector away from defined benefit plans and towards defined contribution plans. While commentators constantly cite an increase in labor mobility as a major reason for the shift in the private sector from defined benefit to defined contribution plans, researchers to date have not been able to document any difference in mobility by pension type. This study argues that the inability to find such a relationship stems from ignoring the important role of job tenure. Using data from the Survey of Income and Program Participation (SIPP) and the Panel Study of Income Dynamics (PSID), the results of duration analyses that include the interaction of job tenure and pension type reveal that workers with between five and ten years of tenure at a firm are 23% more likely to leave a job with a defined contribution plan than with a defined benefit plan. This difference is consistent with differences in the timing of benefit level entitlement between the two types of plans.

Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:cup:jpenef:v:9:y:2010:i:04:p:609-625_99

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