How Much Are Public School Teachers Willing to Pay for Their Retirement Benefits?

Maria Fitzpatrick

No 20582, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Public sector employees receive large fractions of their lifetime income in the form of deferred compensation. The introduction of the opportunity provided to Illinois public school employees to purchase additional pension benefits allows me to estimate employees' willingness-to-pay for benefits relative to the cost of providing them. The results show employees are willing to pay 20 cents on average for a dollar increase in the present value of expected retirement benefits. The findings suggest substantial inefficiency in compensation and cast doubt on the ability of deferred compensation schemes to attract employees.

JEL-codes: H55 H72 H75 I22 J26 J45 (search for similar items in EconPapers)
Date: 2014-10
New Economics Papers: this item is included in nep-age, nep-hrm, nep-lab and nep-lma
Note: AG ED LS PE
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Published as Maria Donovan Fitzpatrick, 2015. "How Much Are Public School Teachers Willing to Pay for Their Retirement Benefits?," American Economic Journal: Economic Policy, American Economic Association, vol. 7(4), pages 165-88, November.

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Journal Article: How Much Are Public School Teachers Willing to Pay for Their Retirement Benefits? (2015)
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