Early Retirement Incentives and Student Achievement

Fitzpatrick, Maria D.; Lovenheim, Michael

doi:10.3386/w19281

Cited by 5 publications

(6 citation statements)

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“…There are a growing number of papers examining the effects of changes in retirement benefits (e.g., Fitzpatrick [2015]; Fitzpatrick and Lovenheim [2014]; Furgeson, Strauss, and Vogt [2006]; Koedel and Xiang [2017]). The most closely related study is Fitzpatrick and Lovenheim (2014), which finds that early retirement incentives have little effect on student test scores and may increase scores in schools with a large proportion of economically disadvantaged students.…”

Section: My Contributions and Review Of The Literaturementioning

confidence: 99%

Are Teacher Pensions 'Hazardous' for Schools?

Mahler

2018

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Patten Priestley MahlerCentre College e-mail: patten.mahler@centre.edu December 2017 ABSTRACT I use a detailed panel of data and a unique modeling specification to explore how public schoolteachers respond to the incentives embedded in North Carolina's retirement system. Like most public-sector retirement plans, North Carolina's teacher pension implicitly encourages teachers to continue working until they are eligible for their pension benefits, and then leave soon afterward. I find that teachers with higher levels of quality, as measured by a teacher's value-added to her students' achievement test scores, are more responsive to the "pull" of teacher pensions. Younger teachers, those with higher salaries, and nonwhite teachers are also more likely to stay during the pension "pull." All teachers show a strong response to the pension "push," with about a quarter of teachers leaving every year once they become eligible for their pension. I depart from other models of teacher retirement by using a Cox proportional hazard model. Given that salaries are generally fixed by the state, I find that the number of years a teacher must work before she is eligible for her full pension benefit is the major driver of variation in pension wealth. This specification has the benefit of a flexible baseline hazard that can easily capture the sharp incentives driving a teacher's retirement decision that are dependent on her proximity to retirement eligibility, and can flexibly account for differences driven by local labor market conditions. These analyses highlight important unintended effects that inform education policies going forward to ensure the retention of high-quality teachers in all types of schools.

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Section: My Contributions and Review Of The Literaturementioning

confidence: 99%

Are Teacher Pensions 'Hazardous' for Schools?

Mahler

2018

SSRN Journal

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“…To formalize the relative patterns in retention rates shown in Figure 2, we estimate the following model based on Fitzpatrick and Lovenheim (2014):…”

Section: Retention Trends In St Louismentioning

confidence: 99%

“…However, the literature on how workers, and teachers in particular, are affected by their incentives to remain in pension-covered employment has produced mixed results. Studies that examine temporary policies that modify workers' retention incentives suggest fairly large responses (e.g., Fitzpatrick and Lovenheim, 2014;Furgeson, Strauss and Vogt, 2006), while studies of permanent changes suggest much smaller responses (Brown, 2013;Smith and West, 2014). Comparisons between DB plans and alternative plans without backloading, like defined-contribution (DC) plans, find little evidence to suggest that workers' exit decisions are meaningfully affected by their DB retention incentives (Gustman and Steinmeier, 1993;Harris and Adams, 2007).…”

Section: Introductionmentioning

confidence: 99%

“…For example, if new, post-enhancement entrants in St. Louis went on to bear most of the enhancement's cost in the form of lower salaries over the course of their careers, then the cost burden on the district could be small. However, based on evidence from Fitzpatrick (2014), who shows that teachers do not value their pension benefits at the cost of providing them, in such a scenario there might also be a reduction in workforce quality, which could offset any retention benefits. For the 1998-1999 teaching cohort, many of whom had already been paid wages for large fractions of their careers, this is less of an issue.…”

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Pension Enhancements and the Retention of Public Employees

Koedel¹,

Xiang

2016

ILR Review

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We use data from workers in the largest public-sector occupation in the United States -teaching -to examine the effect of pension enhancements on employee retention. Specifically, we study a 1999 enhancement to the benefit formula for public school teachers in St. Louis that resulted in an immediate and dramatic increase in their incentives to remain in covered employment. To identify the effect of the enhancement on teacher retention, we leverage the fact that the strength of the incentive increase varied across the workforce depending on how far teachers were from retirement eligibility when it was enacted. Our results indicate that the St. Louis enhancement -which was structurally similar to enhancements that were enacted in other public pension plans across the United States in the late 1990s and early 2000s -was not a cost-effective way to increase employee retention.

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“…This is made possible by the lower cost of skilled labour (the only factor used in government production) 17 We abstract from possible heterogeneity in the skilled labour force which might be particularly important in some cases since the extra workers will all be 60-year-olds whose skills may differ materially from those of the average skilled worker; for interesting recent evidence of this effect in education see Fitzpatrick and Lovenheim (2014). 18 From the linearised equation for the supply of skilled labour, (19") and the assumption that in the short run the skilled population is exogenous in each region, a unit fall in r i in each region implies that l Si is equal to r i /(1-r i ) which is increasing in r i .…”

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confidence: 99%

An increase in the retirement age in China: the regional economic effects

Chen

Groenewold

2016

Applied Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. China"s pension system is in need of comprehensive reform in that it is fragmented in its coverage and significantly under-funded. One measure which has featured in various reform proposals and on which we focus in this paper is to increase the retirement age. Since demographics and industry structure differ considerably across the regions in China, it is likely that a change in retirement age will have significantly different effects across China"s regions. Inter-regional disparities are already very substantial in China and it will be important to know whether changes in pension arrangements will widen or narrow these disparities. It is the object of the research reported in this paper to throw light on this question. To do this we construct a small two-region theoretical model having some Chinese characteristics. We linearise the model and solve it numerically using parameter values derived from Chinese data. We run four experiments, all involving an increase in the retirement age from 60 to 61. The simulations differ according the use made of the extra revenue generated by the policy. All four policies increase welfare and reduce the interregional welfare gap. However, the effects on other, more visible, measures of inter-regional gaps (such as income and output) are less clear and might generate resistance to the policy change, especially by the skilled who generally face reduced wages and income and have to work longer. (about 230 words) Terms of use: Documents in

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Early Retirement Incentives and Student Achievement

Cited by 5 publications

References 8 publications

Are Teacher Pensions 'Hazardous' for Schools?

Are Teacher Pensions 'Hazardous' for Schools?

Pension Enhancements and the Retention of Public Employees

An increase in the retirement age in China: the regional economic effects

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