Stayers as "Workers" and "Savers": Toward Reconciling the Pension-Quit Literature

Richard A. Ippolito

Journal of Human Resources, 2002, vol. 37, issue 2, 275-308

Abstract: The classic selection effect posits that deferred wages attract "stayers." The results in this paper suggest an alternative explanation. Deferred wage contracts attract "savers." All else constant, savers are better workers than nonsavers. A firm naturally works harder to retain better workers, and thus, is led to pay them higher wages; thereby encouraging savers to remain in the firm's employ. This process creates a confluence of deferred wages, high levels of compensation and low quit propensities. In this explanation, "staying" is merely the result of a selection process, and not the underlying factor that drives selection.

Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:uwp:jhriss:v:37:y:2002:i:2:p:275-308

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