Firm-Level Policy Toward Older Workers

36 Pages Posted: 23 Apr 2004 Last revised: 27 Oct 2022

See all articles by Olivia S. Mitchell

Olivia S. Mitchell

University of Pennsylvania - The Wharton School; University of Pennsylvania - The Wharton School, Pension Research Council; National Bureau of Economic Research (NBER)

Rebecca A. Luzadis

Miami University of Ohio - Richard T. Farmer School of Business Administration

Date Written: March 1985

Abstract

This paper focuses on one aspect of long-term labor contracts -- employer-provided pensions -- in order to develop a better understanding of how such contracts affect employment patterns of older workers. Pensions are one of the few elements of the employment package which explicitly describe long term agreements between workers and their employers; consequently they offer a unique opportunity to study these agreements. The present paper combines labor supply and contract theory to examine pension responses to changes in taxes, Social Security benefits, and the federal government's recent decision to lift the age of mandatory retirement. Evidence on a longitudinal sample of pension plans from 1960 to the present suggests:(1) During the 1960-70 period, Social Security increases generated changes in pensions favoring early retirement; and (2) During the 1970-80 period, some plans reduced private pension benefits in response to the raising of the mandatory retirement age.

Suggested Citation

Mitchell, Olivia S. and Luzadis, Rebecca A., Firm-Level Policy Toward Older Workers (March 1985). NBER Working Paper No. w1579, Available at SSRN: https://ssrn.com/abstract=336322

Olivia S. Mitchell (Contact Author)

University of Pennsylvania - The Wharton School ( email )

Philadelphia, PA 19104-6365
United States

University of Pennsylvania - The Wharton School, Pension Research Council ( email )

3302 Steinberg Hall-Dietrich Hall
3620 Locust Walk
Philadelphia, PA 19104-6302
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
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Rebecca A. Luzadis

Miami University of Ohio - Richard T. Farmer School of Business Administration ( email )

Oxford, OH 45056
United States