TY  - JOUR
AU  - Allen,Steven G.
AU  - Clark,Robert L.
AU  - McDermed,Ann A.
TI  - Pensions, Bonding, and Lifetime Jobs
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3688
PY  - 1991
Y2  - April 1991
UR  - http://www.nber.org/papers/w3688
L1  - http://www.nber.org/papers/w3688.pdf
N1  - Author contact info:
Steven G. Allen
Jenkins Graduate School of Management
NC State University
2124 Nelson Hall
Raleigh, NC  27695-7229
Tel: 919/515-6941
Fax: 919/515-5073
E-Mail: STEVE_ALLEN@NCSU.EDU
AB  - A well-known, if underappreciated, finding in the mobility literature is that turnover is much lower in jobs covered by pensions than in other jobs. This could result from capital losses for job changes created by most benefit formulas, the tendency of turnover-prone individuals to avoid jobs covered by pensions, or higher overall compensation levels in such jobs. A switching bivariate probit model of pension coverage and turnover is developed to estimate the effect of each of these factors. The results show that capital losses are the main factor responsible for lower turnover in jobs covered by pensions, but self-selection and compensation levels also play an important role. This is the first direct evidence that bonding is important for understanding long-term employment relationships.
ER  -