pension portability and labor mobility evidence from the survey of income and program participation abstract the evidence presented in this paper casts doubt on the proposition that pension backloading is responsible for the low job mobility rates observed for pension covered workers it corroborates earlier findings by the authors based on different data that pension covered jobs offer higher levels of compensation than workers can obtain elsewhere and it is this compensation premium rather than non portability that accounts for lower turnover among pension covered workers this evidence is further bolstered by the finding that defined contribution plans which are not backloaded and defined benefit plans bear similar negative relations to mobility

stayers as workers and savers the classic selection effect posits that deferred wages attract stayers the results in this paper suggest an alternative explanation deferred wage contracts attract savers all else constant savers are better workers than nonsavers a firm naturally works harder to retain better workers and thus is led to pay them higher wages thereby encouraging savers to remain in the firm s employ this process creates a confluence of deferred wages high levels of compensation and low quit propensities in this explanation staying is merely the result of a selection process and not the underlying factor that drives selection

estimating the extent of potential competition in the korean mobile telecommunications market switching costs and number portability abstract number portability service in the mobile communications market is believed to play an important role in lowering the switching costs which can increase the level of competition among providers the aim of this study was to estimate the switching costs and consumers valuation of the number portability service in the korean mobile communications market using conjoint analysis and the stated preference approach the analysis showed that the switching costs have been lowered considerably since number portability has been in force however a significant level of switching costs still remains despite number portability finally this paper provides some implications for the competition strategy in the mobile communications market

information spillovers gains from trade and interventions in frozen markets we study government interventions in markets suffering from adverse selection importantly asymmetric information prevents both the realization of gains from trade and the production of information that is valuable to other market participants we find a fundamental tension in maximizing welfare while some intervention is required to restore trading too much intervention depletes trade of its informational content we characterize the optimal policy that balances these two considerations and explore how it depends on features of the environment our model can be used to study a program introduced in 2009 to restore information production in the market for legacy assets

why federal workers don t quit quit rates in the federal government are abnormally low some economists and the federal government itself have taken this to mean that federal wages are too high this paper provides an alternative explanation it shows that the timing of compensation across a career as well as its level affect quit rates pensions in particular impose large penalties on workers who quit early and the portion of federal pay in the form of pensions is very high this feature of the federal pay structure may explain its abnormally low quit rate as a general proposition quit rates are poor indices for judging pay adequacy

smooth trading with overconfidence and market power we describe a symmetric continuous time model of trading among relatively overconfident oligopolistic informed traders with exponential utility traders agree to disagree about the precisions of their continuous flows of gaussian private information with enough disagreement an equilibrium exists in which prices reveal the average of all traders signals immediately but traders continue to trade gradually towards target inventories the price is a linear function of a trader s inventory the derivative of a trader s inventory and the average other traders valuations prices reflect a keynesian beauty contest faster than equilibrium trading generates flash crashes jel d8 d43 d47 g02 g14

risky business the decline of defined benefit pensions and firms shifting of risk since the early 1980s employment in the united states has undergone significant transformation as the large corporations that once safeguarded employees with stable jobs and rewards for loyalty have replaced these employment relationships with ones based on cost containment and flexibility one important consequence of these developments is that firms have abdicated their role as a critical risk bearer in society although evidence suggests that firms have increasingly shifted market risks onto their workforce to date there have been few detailed analyses exploring what factors have driven this phenomenon this study adds to our understanding of why firms have transferred risk to their employees by examining the decline of a highly institutionalized practice wherein large u s firms used to bear retirement risk the defined benefit db pension plan through a detailed analysis i show that variance in the presence power and interests of shareholders and employees at the firm level differentially affect a firm s willingness to shift the risk of retirement onto its workers specifically i demonstrate empirically that different types of shareholders have differential effects on a firm s retirement practices suggesting that the changing equity ownership structure of large u s firms has played a key role in how risk is allocated between workers and firms declines in employee power have also played a role because firm levels of unionization positively affect rates of db participation for both unionized and nonunionized workers

spatial boundaries and choice set definition in a random utility model of recreation demand we are concerned with the definition of choice set used in random utility models of recreation demand in particular we are concerned with the spatial boundaries used to define choice sets in this paper using a model of day trip fishing in maine we examine the sensitivity of parameter and welfare estimates to changes in the spatial boundary we find that there exists some threshold distance beyond which adding more sites to the choice set has negligible effects on the estimation results

a repeated nested logit model of atlantic salmon fishing participation and site choice for atlantic salmon fishing are modeled in the context of a repeated three level nested logit model consumer s surplus measures are derived for different levels of species availability in the penobscot river the most important salmon river in new england for comparison six other travel cost models are estimated these include restrictive cases of the nested logit model a partial demand model and two single site demand models comparisons across these models indicate the importance of modeling the participation decision including income effects and of adopting a nested logit structure rather than a single level logit structure

auctions actions and the failure of information aggregation we study a market where k identical and indivisible objects are allocated using a uniform price auction where n k bidders each demand one object before the auction each bidder receives an informative but imperfect signal about the state of the world the good that is auctioned is a common value object for the bidders and a bidder s valuation for the object is determined jointly by the state of the world and an action that he chooses after winning the object but before he observes the state we show that there are equilibria where the auction price is completely uninformative about the state of the world and aggregates no information even in an arbitrarily large auction in the equilibrium that we construct because prices do not aggregate information agents have strict incentives to acquire costly information before they participate in the market also market statistics other than price such as the amount of rationing and bid distributions contain extra information about the state our findings sharply contrast with past work which shows that large auctions aggregate information when there is no ex post action

price inference in small markets this paper investigates the effects of market size on the ability of price to aggregate traders private information to account for heterogeneity in correlation of trader values a gaussian model of double auction is introduced that departs from the standard information structure based on a common fundamental shock the paper shows that markets are informationally efficient only if correlations of values coincide across all bidder pairs as a result with heterogeneously interdependent values price informativeness may not increase monotonically with market size as a necessary and sufficient condition for the monotonicity price informativeness increases with the number of traders if the implied reduction in the absolute value of an average correlation statistic of an information structure is sufficiently small

information aggregation in dynamic markets with strategic traders this paper studies information aggregation in dynamic markets with a finite number of partially informed strategic traders it shows that for a broad class of securities information in such markets always gets aggregated trading takes place in a bounded time interval and in every equilibrium as time approaches the end of the interval the market price of a separable security converges in probability to its expected value conditional on the traders pooled information if the security is non separable then there exists a common prior over the states of the world and an equilibrium such that information does not get aggregated the class of separable securities includes among others arrow debreu securities whose value is 1 in one state of the world and 0 in all others and additive securities whose value can be interpreted as the sum of traders signals

financial knowledge and financial literacy at the household level there is evidence of a relation between numeracy and wealth held outside of pensions and social security with pensions and social security accounting for half of wealth at retirement and evidence that those with pensions save more in other forms one would expect to find knowledge of pensions and social security influencing retirement saving yet we find no evidence that knowledge of pensions and social security is related to nonpension non social security wealth to numeracy or that it plays an intermediate role in the numeracy wealth relation our findings raise questions about policies that would enhance numeracy to increase retirement saving

information spillovers in asset markets with correlated values we study information spillovers in a dynamic setting with privately informed traders and correlated asset values a trade of one asset or lack thereof can provide information about the value of other assets the information content of trading behavior is endogenously determined in equilibrium we show that this endogeneity leads to multiple equilibria when the correlation between asset values is suciently high the

job tenure and asset holdings the paper examines the impact of housing equity and occupational pension scheme membership on job tenure using job duration data from the 1985 general household survey appropriate hazard functions are constructed and estimated housing equity data is constructed from ghs with appropriate adjustment for selection on house movers housing equity has a negative impact on male job tenure which is more pronounced the longer the job lasts in contrast pension scheme membership raises average tenure in accordance with other studies but the results show variation according to pension scheme characteristics

government employment and the provision of fringe benefits this study uses individual level data from the united states to examine the influence of government employment on the provision of five major fringe benefits four of the five benefits are more likely to be provided to government workers than to their private sector counterparts unlike wage comparisons which typically find substantial overpayment only for federal workers the findings suggest that past wage differentials underestimate the true compensation advantage enjoyed by government workers

what are corporate pension liabilities analyses of corporate pension plans often make unstated assumptions about an implicit labor contract an example of the effect of such an assumption is that many mistakenly believe that if a worker s benefits are tied to final salary he is protected against inflation until retirement also the value of a worker s claims is often considered to be independent of the status of the firm s pension fund these implicit contract assumptions are examined and questioned the implications of analyzed pension liabilities in a manner consistent with the analysis of other corporate liabilities are explored

do changes in pension incentives affect retirement a longitudinal study of subjective retirement expectations this paper investigates the responsiveness of individuals retirement decisions to forward looking measures of pension accumulations in contrast to previous research we use within person variation in retirement incentives and are able to control for unobserved heterogeneity in tastes for retirement by studying a panel of subjective retirement expectations we confirm that individuals do respond as expected to pension incentives even when we control for individual fixed effects however the magnitude of these responses differs when estimated from models based on within person versus cross sectional variation the inclusion of fixed effects reduces the response by about half

the effect of nesting structure specification on welfare estimation in a random utility model of recreation demand an application to the demand for recreational fishing nested logit has become common in estimating random utility models of recreation demand because welfare analysis is often the objective of estimating these models it seems natural to ask what effect does the choice of nesting structure have on the welfare estimates generated by these models therefore we compare the results of nine nesting structures andfindthat the variation in welfare estimates across the models is not large our results are contrary to those of kling and thomson and shaw and ozog the difference appears to originate with differences in the estimated dissimilarity coefficients in the nested models

information aggregation and allocative efficiency in smooth markets recent years have seen extensive investigation of the information aggregation properties of markets however relatively little is known about conditions under which a market will aggregate the private information of rational risk averse traders who optimize their portfolios over time in particular what features of a market encourage traders to ultimately reveal their private information through trades we consider a market model involving finitely many informed risk averse traders interacting with a market maker our main result identifies a basic asymptotic smoothness condition on prices in the market that ensures information is aggregated as long as portfolios converge furthermore under this assumption the allocation achieved is ex post pareto efficient asymptotic smoothness is fairly mild it requires that eventually infinitesimal purchases or sales should see the same per unit price notably we demonstrate that under some mild conditions algorithmic markets based on cost functions or equ

the role of pensions in the labor market a survey of the literature because employer sponsored group pension plans entail agreements between workers and their employers explicitly linking future payment and employment they offer an unusual window into long term employment relationships this review of recent research on pensions explores how pensions influence employee compensation retirement turnover and other matters central to the determination of labor s price and quantity over time the authors also outline some unanswered questions and difficult to reconcile findings because the pension promise involves an explicit and relatively well documented set of statements regarding future contingent payment and employment an examination of the design and operation of employersponsored group pension plans can yield important insights into the long term employment relationship specifically pension research illuminates some important labor market questions in two ways it offers insight into an important element of compensation in its own right and it furthers our understanding of labor markets in which long term

pension enhancements and the retention of public employees the authors use data from workers in the largest public sector occupation in the united states teaching to examine the effect of pension enhancements on employee retention specifically they study

fringe benefits and labor mobility interindustry factor mobility is a crucial determinant of the income distribution effects of exogenous changes in relative commodity prices this examination of interindustry variation in wages and profits using data from manufacturing industries from

limiting environmental program contradictions a demand systems application to fishery management economically efficient natural resource policy requires the comprehensive management of environmental improvements over a system of sites use of multisite demand and benefit models can reduce the number and cost of environmental program contradictions in this paper we present a multisite demand model that incorporates several quality dimensions for a system of new mexico fishing sites use of the model permits managers to improve total welfare at lower cost by simultaneously distributing opportunity across all elements in resource users choice sets model results show that errors that result from independently adding values of interdependent program elements approach 50

estimation and welfare calculations in a generalized corner solution model with an application to recreation demand the kuhn tucker model of wales and woodland 1983 provides a utility theoretic framework for estimating preferences over commodities for which individuals choose not to consume one or more of the goods due to the complexity of the model however there have been few applications in the literature and little attention has been paid to the problems of welfare analysis within the kuhn tucker framework this paper provides an application of the model to the problem of recreation demand in addition we develop and apply a methodology for estimating compensating variation relying on monte carlo integration to derive expected welfare changes

learning and price discovery in a search market we introduce learning into an otherwise standard two sided search and bargaining market there is uncertainty about the price distribution due to uncertainty about an underlying exogenous state of relative demand in the high state buyers are on the long side otherwise they are on the short side in equilibrium prices are on average higher in the high state individual agents learn about the distribution while searching agents typically start out by experimenting with a tough bargaining position buyers may initially insist on a low price and sellers on a high price after successive failures to trade agents become increasingly pessimistic about the market conditions and soften their bargaining stance when frictions are small equilibrium transaction prices are approximately market clearing despite aggregate demand being unknown thus the search and bargaining procedure enables price discovery in a decentralized market

how much information is incorporated in financial asset prices experimental evidence we propose a new estimation method and use experimental data from multiple double auction experiments in the literature to directly estimate how much information is incorporated in financial market prices we find that public information is almost completely reflected in prices but that surprisingly little private information less than 50 is incorporated in prices our estimates therefore suggest that while semi strong informational efficiency is consistent with the data financial market prices may be very far from strong form efficiency we compare our estimates with beliefs of economists surveyed at the econometric society meetings and find that economists and finance researchers alike expect market prices to reflect considerably more private information than what we estimated

two separated effects of employer provided health insurance on job mobility we estimate the effect of employer provided health insurance ephi on job mobility via a dynamic model of joint employment and health insurance decision in the presence of uncertainty about wage rate and health status transitions the model is based on a markov decision process in which a hedonic wage approach provides an economic rationale for the different choices and health insurance serves as an input to the health production process including health transitions in the model helps us to understand how the availability of ephi positive job characteristic and holding ephi the wage health insurance trade off enter into the individuals decisions the model is estimated using the 1999 2000 medical expenditure panel survey panel 4 and the results show that the pure effects of holding ephi are negligible the full effects of ephi are significant and the degrees of the inefficiency vary between 14 and 25 across different states

the effects of employer provided health insurance on worker mobility the authors use data from the 1984 survey of income and program participation sipp to investigate whether employer provided health insurance reduced worker mobility a phenomenon termed job lock the sipp provides information on variables particularly pension receipt job tenure and spouse job change that were omitted from previous studies and are the authors argue key to the estimation of welldefined mobility models for dual earner married men and women the authors estimate a model that accounts for the interaction between husbands and wives job change decisions for both married and single individuals the results provide fairly strong evidence ofjob lock among women but only weak indications of job lock among men the authors speculate that this finding reflects higher health care use by women than by men

model selection and misspecification in discrete choice welfare analysis this study extends the work by herriges and kling 1997 to further evaluate the impact of discrete choice modelling techniques on welfare measures particularly we evaluate the performance of the increasingly popular mixed logit model and the computational strategy for deriving discrete choice welfare measures our simulation results show that model misspecification can have profound effects on welfare measures in general the flexible mixed logit model performs relatively well in the presence of misspecification however when the nesting structure can be appropriately identified via statistical tests and a priori knowledge experience the nested logit model provides more reliable welfare measures than the mixed logit model

employer size and labor turnover the role of pensions the well documented lower labor turnover in large firms than in smaller firms has been cited as evidence that large firms pay workers above their opportunity wage this study investigates whether t

sampling and aggregation issues in random utility model estimation measurement of nonmarket values often involves subjective judgments since these judgments may influence results they should be carefully considered i focus on an aspect of subjective choice relating to the estimation of random utility models such models require specification of each recreationalist s choice set whether an individual perceives his choice set as composed of all possible alternatives a few popular alternatives or collections of spatially aggregated alternatives is an important judgment affecting the conclusions

the influence of pensions on job mobility in this paper we construct a model of the loss of firm specific capital suffered by employees with occupational pensions who change job the simplest loss function may be represented as the product of job tenure and years to retirement estimates of logit equations for individual job search in great britain suggest that the effect of pension status can be satisfactorily captured by this simple loss function these equations and others for job turnover indicate that membership of an occupational pension scheme substantially reduces job mobility

what are occupational pension plan entitlements worth in britain the acquisition of rights by workers in private pension plans underpins retirement behaviour recruitment policy and wage structure but there is controversy as to how these individual pension rights should be valued the paper combines four data sets to calculate pension entitlements for a sample of 3000 british workers in 1987 expected scheme tenure is a key variable in valuation younger workers and women face greater initial uncertainty as to their pension outcomes which is resolved as job tenure lengthens given the distribution of tenure durations many employees would obtain higher returns in defined contribution schemes than in a typical final salary defined benefit plan

the effects of pension funds on markets performance a review the worldwide reforming process of pension systems triggered by the demographic transition and globalization has led several countries to implement multi pillar pension systems and enhance pension funds for this reason the studies on the effects that pension funds exert on markets performance have been flourishing in the last decades in this paper we provide an updated review of the empirical advances in this field of study with particular focus on the effects that pension funds produce on labour markets financial markets and economic growth