Abstract

Relative to defined benefit (DB) plans, defined contribution (DC) plans have been linked to greater employee mobility. Because employees with different underlying mobility tendencies may sort across plans or firms, the relationship between plan type and mobility may be due to selection. We identify the role of selection by exploiting a natural experiment at an employer, in which the transition from a DB to a DC pension plan was affected by default rules. Using the default assignment as a source of exogenous variation in plan enrollment, we find that employees with higher mobility tendencies self-select into the DC plan.

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Additional Information

ISSN
1548-8004
Print ISSN
0022-166X
Pages
pp. 654-679
Launched on MUSE
2017-07-27
Open Access
No
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