Compensating wage differentials for defined benefit and defined contribution occupational pension scheme benefits

Joachim Inkmann ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: The theory of equalizing differences suggests that employer provided pension benefits should be compensated by reduced wage benefits for an employee’s given produc-tivity potential. This paper presents an empirical analysis of compensating wage differentials for occupational pension scheme benefits in the UK using the newly available English Longi-tudinal Study of Ageing. The data allows us to differentiate between Defined Benefit (DB) and Defined Contribution (DC) schemes and to consider different measures of pension bene-fits based on current contributions and changes in accrued pension benefit rights. In our pre-ferred specifications we find evidence for perfect compensating wage differentials for both occupational DB and DC pension scheme benefits.

Keywords: compensating wage differentials; occupational pension schemes; DB; DC; pension benefits; contributions; ABO; PBO (search for similar items in EconPapers)
JEL-codes: G23 J32 J33 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2006-05-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:24516

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