The Employment Contract, Corporate Financial Structure and the Regulation of Private Pension Plan Funding

Richard Arnott and Mark Gersovitz ()

Working Paper from Economics Department, Queen's University

Abstract: One Strand of the literature of the employment contract focuses on the role of the contract in providing for the efficient sharing of risk between capitalists and workers. One way capitalists can shift risk to workers is to provide part of workers" renumeration in the form of an unfunded, deferred pension. Since bonds, in the event of bankruptcy, are typically senior to unfunded pension liabilities, capitalists can also affect their risk by altering the firm's debt to equity ratio. These observations suggest that corporate financial structure and the employment contract are interdependent. This paper has two major goals. The first it to take a step towards integrating the theory of corporate financial structure with that of the employment contract. The second is to investigate the consequences of legislation which regulates the funding of private pensions.

Pages: 35
Date: 1978
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:qed:wpaper:286

Access Statistics for this paper

More papers in Working Paper from Economics Department, Queen's University Contact information at EDIRC.
Bibliographic data for series maintained by Mark Babcock ().