Pension Enhancements and the Retention of Public Employees

Cory Koedel and P. Brett Xiang

ILR Review, 2017, vol. 70, issue 2, 519-551

Abstract: The authors use data from workers in the largest public-sector occupation in the United States—teaching—to examine the effect of pension enhancements on employee retention. Specifically, they study a 1999 enhancement to the benefit formula for public school teachers in St. Louis, Missouri, that resulted in an immediate and dramatic increase in their incentives to remain in covered employment. To identify the effect of the enhancement on teacher retention, the analysis leverages the fact that the strength of the incentive increase varied across the workforce depending on how far teachers were from retirement eligibility when it was enacted. The results indicate that the St. Louis enhancement—which was structurally similar to enhancements that were enacted in other public pension plans across the United States in the late 1990s and early 2000s—was not a cost-effective way to increase employee retention.

Keywords: labor market institutions; labor and employment policies; labor supply elasticities; pay practices; economics; education; retirement; retention (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (8)

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Working Paper: Pension Enhancements and the Retention of Public Employees (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:ilrrev:v:70:y:2017:i:2:p:519-551

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