Retirement and the Evolution of Pension Structure
Defined benefit pension plans have become considerably less common since the early 1980s, while defined contribution plans have spread. Previous research showed that defined benefit plans, with sharp incentives encouraging retirement after a certain point, contributed to the striking postwar decline in American retirement ages. In this paper we find that the absence of age-related incentives in defined contribution plans leads workers to retire almost two years later on average, compared to workers with defined benefit plans. Thus, the evolution of pension structure can help explain recent increases in employment among people in their 60s, after decades of decline.
Published: Friedberg, Leora and Anthony Webb. “Retirement and the Evolution of Pension Structure.” Journal of Human Resources 40, 2 (Spring 2005): 281-308.