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Pension type, tenure, and job mobility*

Published online by Cambridge University Press:  06 April 2010

KELLY HAVERSTICK ,
ALICIA H. MUNNELL ,
GEOFFREY SANZENBACHER  and
MAURICIO SOTO
KELLY HAVERSTICK
Affiliation:
The Center for Retirement Research at Boston College
ALICIA H. MUNNELL
Affiliation:
The Center for Retirement Research at Boston College
GEOFFREY SANZENBACHER*
Affiliation:
The Center for Retirement Research at Boston College
MAURICIO SOTO
Affiliation:
The Center for Retirement Research at Boston College
*
(e-mail: sazenba@bc.edu)
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Abstract

Over the last 25 years, the United States has seen a dramatic shift in the private sector away from defined benefit plans and towards defined contribution plans. While commentators constantly cite an increase in labor mobility as a major reason for the shift in the private sector from defined benefit to defined contribution plans, researchers to date have not been able to document any difference in mobility by pension type. This study argues that the inability to find such a relationship stems from ignoring the important role of job tenure. Using data from the Survey of Income and Program Participation (SIPP) and the Panel Study of Income Dynamics (PSID), the results of duration analyses that include the interaction of job tenure and pension type reveal that workers with between five and ten years of tenure at a firm are 23% more likely to leave a job with a defined contribution plan than with a defined benefit plan. This difference is consistent with differences in the timing of benefit level entitlement between the two types of plans.

Type
Articles
Information
Journal of Pension Economics & Finance , Volume 9 , Issue 4 , October 2010 , pp. 609 - 625
Copyright
Copyright © Cambridge University Press 2010

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Footnotes

*

The authors' would like to thank Richard Kopke and Anthony Webb, seminar participants at the Boston College Labor Economics Lunch Seminar, and two anonymous referees for comments. We are also grateful to JP Aubrey and Jerilyn Libby for excellent research assistance. The authors' are solely responsible for any mistakes.

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