Incentives and Limitations of Employment Policies on Retirement Transitions: Comparison of Public and Private Sectors

This project will examine employment and compensation policies that affect retirement transitions and labor market opportunities of older workers. These policies differ substantially between the public and private sectors. While most public sector employees continue to be covered by defined benefit plans and retiree health plans, defined contribution plans are now the dominant retirement plan offered by private firms and the number of firms that offer health insurance to retirees is declining. These compensation differences may influence the age of retirement from career jobs and the probability of working after retirement. These differences, in turn, may have long-term implications for the retirement income security and wellbeing of workers. This is of particular concern in an environment where public sector employers are seeking to reduce benefits to contain costs and ensure program sustainability. This research will provide policymakers with a better understanding of the role of retirement-related compensation in affecting retirement behavior and retirement income security for workers.