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Retirement Plan Type and Employee Mobility: The Role of Selection

Retirement Plan Type and Employee Mobility: The Role of Selection ABSTRACT: Relative to defined benefit (DB) plans, defined contribution (DC) plans have been linked to greater employee mobility. Because employees with different underlying mobility tendencies may sort across plans or firms, the relationship between plan type and mobility may be due to selection. We identify the role of selection by exploiting a natural experiment at an employer, in which the transition from a DB to a DC pension plan was affected by default rules. Using the default assignment as a source of exogenous variation in plan enrollment, we find that employees with higher mobility tendencies self-select into the DC plan. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Human Resources University of Wisconsin Press

Retirement Plan Type and Employee Mobility: The Role of Selection

Journal of Human Resources , Volume 52 (3) – Jul 27, 2017

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Publisher
University of Wisconsin Press
Copyright
©by the Board of Regents of the University of Wisconsin System
ISSN
1548-8004
Publisher site
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Abstract

ABSTRACT: Relative to defined benefit (DB) plans, defined contribution (DC) plans have been linked to greater employee mobility. Because employees with different underlying mobility tendencies may sort across plans or firms, the relationship between plan type and mobility may be due to selection. We identify the role of selection by exploiting a natural experiment at an employer, in which the transition from a DB to a DC pension plan was affected by default rules. Using the default assignment as a source of exogenous variation in plan enrollment, we find that employees with higher mobility tendencies self-select into the DC plan.

Journal

Journal of Human ResourcesUniversity of Wisconsin Press

Published: Jul 27, 2017

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