TY  - JOUR
AU  - Lazear,Edward P.
TI  - Pensions as Severance Pay
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 944
PY  - 1984
Y2  - July 1984
UR  - http://www.nber.org/papers/w0944
L1  - http://www.nber.org/papers/w0944.pdf
N1  - Author contact info:
Edward P. Lazear
Graduate School of Business
Stanford University
Stanford, CA 94305
Tel: 650/723-9136
Fax: 650/723-0498
E-Mail: lazear@stanford.edu
M1  - published as Edward P. Lazear. "Pensions as Severance Pay," in Zvi Bodie and John B. Shoven, editors, "Financial Aspects of the United States Pension System" University of Chicago Press (1983)

AB  - Earlier claims that pensions serve as severance pay are corroborated by a new data set drawn from the 1980 Banker's Trust corporate pension plan study. A model is developed that shows how pension values which vary with the age of retirement make both workers and firms better off by moving the equilibrium in the direction of a perfect-information, first-best optimum. This requires that pension values decline with the age of retirement beyond a certain point. Evidence from the 1975 and 1980 data sets supports this claim. To the extent that any significant change has occurred between 1975 and 1980, most important is that the ratio of early retirement pension value to normal retirement pension value has increased.
ER  -