Central Policies for Local Debt: The Case of Teacher Pensions

Robert P. Inman, David J. Albright

NBER Working Paper No. 2166
Issued in 1987
NBER Program(s):   PE

The recent debt crises in New York City and Cleveland, the deterioration of public infra-structures in certain of our states and larger cities, and the occasional bankruptcy of smaller pension plans suggest that not all of local finance stands on a sound fiscal base. This paper examines the trends in funding for one form of state and local government debt--teacher pensions underfundings -- and asks what a central government might do to check any unwanted growth in these liabilities. The analysis concludes (i) that this form of state-local debt is sizeable and growing, (ii) that state and local governments have an implicit pay-as-you-go bias in pension financing which encourages the growth of debt, but (iii) central government benefit and funding regulations or debt relief policies can slow, or even reverse, that growth.

(527 K)

(384 K)

This paper is available as PDF (527 K) or DjVu (384 K) (Download viewer) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w2166

Published: Published as "Appraising the Funding Status of Teacher Pensions: An Econometric Approach", NTJ, Vol. 39, no. 1 (1986): 21-34.

Users who downloaded this paper also downloaded these: