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PENSION PLAN CHARACTERISTICS AND FRAMING EFFECTS IN EMPLOYEE SAVINGS BEHAVIOR
David Card and Michael Ransom
The Review of Economics and Statistics
Vol. 93, No. 1 (February 2011), pp. 228-243
Published by: The MIT Press
Stable URL: https://www.jstor.org/stable/23015931
Page Count: 16
You can always find the topics here!Topics: Pension contributions, Employee pension plans, Contribution rates, Old age benefits, Age, Employer contributions, Retirement savings, Salary, Universities
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Defined contribution pensions in many postsecondary institutions are funded by a combination of an employer premium and a mandatory employee premium. Individuals can also contribute to a supplemental savings account. Holding constant total compensation, standard reasoning suggests that supplemental savings should depend negatively on the sum of the employer and employee pension contributions. Contrarily, we find that the supplementary savings of professors are significantly more sensitive to employee contributions than to employer contributions. This asymmetry is consistent with different marginal propensities to save out of the salary and pension components of compensation. Nevertheless, impacts on lifetime utility are relatively modest.
The Review of Economics and Statistics © 2011 The MIT Press