TY  - JOUR
AU  - Bulow,Jeremy I.
AU  - Morck,Randall
AU  - Summers,Lawrence H.
TI  - How Does the Market Value Unfunded Pension Liabilities?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1602
PY  - 1987
Y2  - March 1987
UR  - http://www.nber.org/papers/w1602
L1  - http://www.nber.org/papers/w1602.pdf
N1  - Author contact info:
Jeremy I. Bulow
Stanford University
Graduate School of Business
Stanford, CA  94305-7298
Tel: 650/723-2160
Fax: 650/725-8916
E-Mail: jbulow@stanford.edu

Randall Morck
Faculty of Business
University of Alberta
Edmonton, AB  T6G 2R6
CANADA
Tel: 780/492-5683
Fax: 780/492-3325
E-Mail: randall.morck@ualberta.ca

Lawrence H. Summers
Harvard Kennedy School of Government
79 JFK Street
Cambridge, MA 02138
Tel: 617/495-9322
Fax: 617/495-0436
E-Mail: lhs@harvard.edu
M1  - published as Jeremy I. Bulow, Randall Morck, Lawrence H. Summers. "How Does the Market Value Unfunded Pension Liabilities?," in Zvi Bodie, John B. Shoven, and David A. Wise, eds., "Issues in Pension Economics" University of Chicago Press (1987)

M2  - featured in NBER digest on 1985-11-01
AB  - We lead off by discussing a number of theoretical reasons for expecting various relationships between a firm's unfunded pension liability and its market value. We then discuss our doubts about the methodology of earlier papers which studied the empirical relation between funding and market value using standard cross sectional techniques. A modified cross sectional approach which alleviates some of these doubts, and a variable effect event study methodology which alleviates most of them are both employed to investigate the issues raised in the first part of the paper. Our conclusion confirms those of earlier studies that unfunded pension liabilities are accurately reflected in lower share prices.
ER  -