How Much Do Teachers Value Deferred Compensation? Evidence from Defined Contribution Rate Choices. Working Paper No. 242-0920

Autor/inn/en	Goldhaber, Dan; Holden, Kristian L.
Institution	National Center for Analysis of Longitudinal Data in Education Research (CALDER) at American Institutes for Research
Titel	How Much Do Teachers Value Deferred Compensation? Evidence from Defined Contribution Rate Choices. Working Paper No. 242-0920
Quelle	(2020), (36 Seiten) PDF als Volltext kostenfreie Datei Verfügbarkeit
Sprache	englisch
Dokumenttyp	gedruckt; online; Monographie
Schlagwörter	Compensation (Remuneration); Retirement Benefits; Teacher Retirement; Teacher Attitudes; Public School Teachers; Preferences; Illinois; Washington + Suchen Sie Ihr Suchwort? Abfindung; Kompensation; Lohnausgleich; Retirement pay; Ruhegehalt; Lehrerverhalten
Abstract	How much do teachers value compensation that is deferred until retirement? This question is important because the vast majority of public school teachers are covered by defined benefit (DB) pension plans that "backload" a large share of compensation to retirement relative to the compensation structure in the private sector. There is little evidence, other than Fitzpatrick (2015), however, about whether DB pensions are consistent with teacher preferences for current and deferred compensation. This study examines a unique setting in Washington State, where teachers enroll in a hybrid, DB-Defined Contribution (DC) pension system, and have choices over their DC contribute rate. These choices reveal preferences about the value teachers place on current versus retirement compensation. We find that teachers choose to contribute an average of 8.18 percent, significantly more than the minimum required contribution of 5 percent. This suggests that teachers value retirement compensation significantly more than previously estimated by Fitzpatrick. Potential explanations for the difference in findings from prior evidence are discussed, including estimation strategies, differences in state settings, overall plan generosity, and the potential for teachers to view DB and DC pensions as different products. (As Provided).
Anmerkungen	National Center for Analysis of Longitudinal Data in Education Research. American Institutes for Research, 1000 Thomas Jefferson Street NW, Washington, DC 20007. Tel: 202-403-5796; Fax: 202-403-6783; e-mail: info@caldercenter.org; Web site: https://caldercenter.org
Erfasst von	ERIC (Education Resources Information Center), Washington, DC
Update	2024/1/01