Retirement Choices by State and Local Public Sector Employees: The Role of Eligibility and Financial Incentives

Abstract

n/a I thank Sita Slavov and conference participants at the NBER Conference on Incentives and Limitations of Employment Policies on Retirement Transitions for useful comments. I also thank seminar participants at Michigan State University, the Michigan Retirement Research Center and staff for their support of this project, as well as the staff at the Michigan Center for the Demography of Aging who have enabled my access to restricted data. Bryce S. Vanderberg provided excellent research assistance. All errors are my own. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

Retirement incentives and behavior of private and public sector workers

“…In short, we find that both types of workers respond to our dynamic incentive measure, PV. This finding differs from Papke (2019), who fails to find a statistically significant effect of PV. One potential explanation is that her regressions include indicator variables for whether the individual has reached the pension plan's early and normal retirement ages, variables that may be strongly correlated with the PV measure, leaving insufficient variation to estimate its effect.…”

“…The study most similar to ours is Papke (2019). Both studies use HRS data to estimate pension incentives for public sector workers and run retirement regressions including PV.…”

“…This analysis contributes to our understanding of retirement incentives and retirement behavior by providing a comparison of public and private sector workers. While there is a substantial literature on retirement incentives and retirement, including numerous studies on public sector workers, most studies examine these workers in isolation rather than comparing their experiences to those of private sector workers; an exception is Papke (2019), discussed further below. This paper is also distinguished from the existing literature on public sector workers by its ability to incorporate both Social Security and private pensions into the calculation of retirement incentives; many existing studies use state or local administrative records but lack data on Social Security covered earnings.…”

Before Officially Leaving the Organization: Retirement Planning and Preparation of Filipino Teachers

“…Therefore, these considerations may lead an individual to retire early than the mandatory age but do not mean that they will no longer work, rather a chance to try a different career. In a study by Papke (2019), it is interesting to note that; "becoming eligible for early retirement, or receiving an early-out offer, significantly increases the probability of retiring." Since every individual is unique in experiences and perspectives, they will have different ideas when it comes to retirement.…”

Retirement decisions in a changing labor market

“…A special issue of the Journal of Pension Economics and Finance (October 2019) containing nine papers examined various aspects of labor force participation at older ages as well as the adequacy of retirement savings (Bronshtein et al, 2019;Clark et al, 2019;Coe 2019;Fitzpatrick, 2019;Horneff et al, 2019;Hsu et al, 2019;Morrill and Westall, 2019;Papke, 2019;Quinn et al, 2019). The set of six papers in this special issue continue to explore those topics, with four of them reporting results based on new survey data collected by the authors.…”