This is the program for the 2010 Joint Statistical Meetings in Vancouver, British Columbia.
Abstract Details
Activity Number:
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579
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Type:
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Topic Contributed
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Date/Time:
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Wednesday, August 4, 2010 : 2:00 PM to 3:50 PM
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Sponsor:
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Business and Economic Statistics Section
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Abstract - #306842 |
Title:
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Teacher Pension Incentives, Retirement Behavior, and Potential for Reform in Arkansas
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Author(s):
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Robert M. Costrell+ and Josh McGee*+
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Companies:
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University of Arkansas and University of Arkansas
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Address:
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201 Graduate Education Building, Fayetteville, AR, 72701, USA 201 Graduate Education Building, Fayetteville, AR, 72701, USA
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Keywords:
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pension ;
teacher retirement ;
defined benefit ;
cash balance ;
peak value ;
probit
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Abstract:
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In this paper we present an empirical investigation of the behavioral response to the Arkansas teacher pension plan, as well as to a possible reform plan. We examine the plan parameters and the sharp incentives these parameters create to work until service eligibility requirements are met, often in one's early fifties, and to separate shortly thereafter. We then estimate the effect of pension wealth accrual on teacher separation decisions using a new longitudinal dataset of Arkansas teachers. The resulting coefficients are subsequently used to compare predicted separation probabilities under the current regime versus a constant accrual retirement plan. We find evidence that teachers' retirement decisions are sensitive to pension wealth accrual. Our simulations suggest that a constant accrual plan could notably smooth the pattern of retirement behavior from that currently observed.
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The address information is for the authors that have a + after their name.
Authors who are presenting talks have a * after their name.
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