Abstract

http://ssrn.com/abstract=1973668
 
 

References (37)



 
 

Citations (1)



 


 



The Revenue Demands of Public Employee Pension Promises


Robert Novy-Marx


Simon Business School, University of Rochester; National Bureau of Economic Research (NBER)

Joshua D. Rauh


Stanford Graduate School of Business; National Bureau of Economic Research (NBER)

September 16, 2012


Abstract:     
We calculate increases in contributions required to achieve full funding of state and local pension systems in the U.S. over 30 years. Without policy changes, contributions would have to increase by 2.5 times, reaching 14.1% of the total own-revenue generated by state and local governments. This represents a tax increase of $1,385 per household per year, around half of which goes to pay down legacy liabilities while half funds the cost of new promises. We examine sensitivity to asset return assumptions, wage correlations, the treatment of workers not currently in Social Security, and endogenous geographical shifts in the tax base.

Number of Pages in PDF File: 63

Keywords: pensions, state and local government, public finance

JEL Classification: H74, H70, H31, E62, H55

working papers series


Download This Paper

Date posted: December 16, 2011 ; Last revised: October 16, 2012

Suggested Citation

Novy-Marx, Robert and Rauh, Joshua D., The Revenue Demands of Public Employee Pension Promises (September 16, 2012). Available at SSRN: http://ssrn.com/abstract=1973668 or http://dx.doi.org/10.2139/ssrn.1973668

Contact Information

Robert Novy-Marx (Contact Author)
Simon Business School, University of Rochester ( email )
Rochester, NY 14627
United States
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Joshua D. Rauh
Stanford Graduate School of Business ( email )
518 Memorial Way
Stanford, CA 94305-5015
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Feedback to SSRN


Paper statistics
Abstract Views: 2,658
Downloads: 691
Download Rank: 18,933
References:  37
Citations:  1

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo8 in 0.328 seconds