TY  - JOUR
AU  - Brown,Jeffrey R.
AU  - Clark,Robert
AU  - Rauh,Joshua
TI  - The Economics of State and Local Public Pensions
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 16792
PY  - 2011
Y2  - February 2011
UR  - http://www.nber.org/papers/w16792
L1  - http://www.nber.org/papers/w16792.pdf
N1  - Author contact info:
Jeffrey R. Brown
Department of Finance
University of Illinois at Urbana-Champaign
515 East Gregory Drive
Champaign, IL 61820
Tel: 217/333-3322
E-Mail: brownjr@illinois.edu

Robert L. Clark
Poole College of Management
Box 7229
North Carolina State University
Raleigh, NC 27695
Tel: 919/515-4568
Fax: 919/515-6943
E-Mail: robert_clark@ncsu.edu

Joshua Rauh
Stanford Graduate School of Business
Stanford University
Knight Management Center
655 Knight Way
Stanford, CA 94305-7298
Tel: 650-723-9898
Fax: 650-725-6152
E-Mail: Rauh_Joshua@gsb.stanford.edu
AB  - This paper provides an overview of an economics-based perspective on the financial aspects of state and local public pensions in the U.S.  Drawing on the research commissioned for an NBER research program on this topic, we discuss the large degree to which public pension liabilities exceed the assets set aside to fund them.  We summarize issues related to the optimality of pre-funding, portfolio allocation, the discounting of liabilities, as well as how plans operate in practice.  We also lay out an agenda for future research related to financial aspects of public pensions, retiree health plans for public employees, as well as issues related to plan design and labor market outcomes.
ER  -