RT Journal Article
SR Electronic
T1 Teacher Pension Plan Incentives, Retirement Decisions, and Workforce Quality
JF Journal of Human Resources
JO J Hum Resour
FD University of Wisconsin Press
SP 1218-9912R2
DO 10.3368/jhr.57.1.1218-9912R2
A1 Shawn Ni
A1 Michael Podgursky
A1 Xiqian Wang
YR 2020
UL http://jhr.uwpress.org/content/early/2020/01/08/jhr.57.1.1218-9912R2.abstract
AB We analyze late-career teacher turnover induced by pension incentives. Using longitudinal data on Tennessee teachers, we find high quality teachers less likely to retire conditional on age and experience. We estimate a structural model for retirement that allows high and lower quality teachers to have different work-retirement preferences and use it to simulate the effect of alternative pension plan designs. Enhancements to traditional plans accelerate teacher retirement and reduce average teacher quality, whereas defined contribution (DC) plans have the opposite effect. Under the current plan, targeted retention bonuses would delay retirement of high quality teachers at relatively modest cost.