The Effects of Political Competition on the Funding of Public-Sector Pension Plans (Revised June 2020)

Sutirtha Bagchi

No 36, Villanova School of Business Department of Economics and Statistics Working Paper Series from Villanova School of Business Department of Economics and Statistics

Abstract: In politically competitive jurisdictions, there can be strong electoral incentives to underfund public pensions in order to keep current taxes low. I examine this hypothesis using panel data for over 2,000 local pension plans from Pennsylvania spanning the period 1985–2017. The results suggest that more politically competitive municipalities tend to have pension plans that are less funded. The effects of political competition are driven by municipalities that have a higher proportion of uninformed voters and are absent for pension plans offered by municipal authorities. The negative relationship between political competition and funding status is present for state pensions as well.

Keywords: Public-sector pensions; political competition; unfunded liabilities; actuarial funded ratio (search for similar items in EconPapers)
JEL-codes: H75 J45 (search for similar items in EconPapers)
Date: 2017-07
New Economics Papers: this item is included in nep-age, nep-cdm and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://repec.library.villanova.edu/workingpapers/VSBEcon36R1.pdf (application/pdf)

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:vil:papers:36

Access Statistics for this paper

More papers in Villanova School of Business Department of Economics and Statistics Working Paper Series from Villanova School of Business Department of Economics and Statistics Contact information at EDIRC.
Bibliographic data for series maintained by Christopher Kilby ().