Retirement Plan Participation in the United States: Do Public Sector Employees Save More?

Chatterjee, Swarn and Zahirovic-Herbert, Velma (2009): Retirement Plan Participation in the United States: Do Public Sector Employees Save More? Published in: European Journal of Social Sciences , Vol. 7, No. 4 (February 2009): pp. 30-40.

Abstract

This study examines retirement plan participation and savings behavior for American public and private sector employees using the Panel Study of Income Dynamics (PSID) data set. This paper also examines the determinants of preference for a diversified portfolio within the retirement plans. The findings of this study indicate that the population’s plan participation increases with age, income, and education level. The public sector employees are more likely than others to participate in defined benefits plans. Conversely, they are less likely to participate in the defined contribution plans. Also, the public sector employees who participate in defined contribution plans hold lower amounts within their retirement accounts. The public sector employees are more likely to diversify their retirement portfolios or allocate them in bonds or annuities and are less likely to hold all or most of their wealth in stocks. Preference for diversification also increases with age, income and educational attainment.

• Item Type: MPRA Paper
• Language: English
• Keywords: Retirement saving; IRA; Plan Participation; Asset Allocation
• Subjects: J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J32 - Nonwage Labor Costs and Benefits ; Retirement Plans ; Private Pensions; D - Microeconomics > D9 - Intertemporal Choice > D91 - Intertemporal Household Choice ; Life Cycle Models and Saving; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J26 - Retirement ; Retirement Policies

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