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Full-Text Articles in Education
Are Teacher Pensions "Hazardous" For Schools?, Patten Priestley Mahler
Are Teacher Pensions "Hazardous" For Schools?, Patten Priestley Mahler
Upjohn Institute Working Papers
I use a detailed panel of data and a unique modeling specification to explore how public schoolteachers respond to the incentives embedded in North Carolina’s retirement system. Like most public-sector retirement plans, North Carolina’s teacher pension implicitly encourages teachers to continue working until they are eligible for their pension benefits, and then leave soon afterward. I find that teachers with higher levels of quality, as measured by a teacher’s value-added to her students’ achievement test scores, are more responsive to the “pull” of teacher pensions. Younger teachers, those with higher salaries, and nonwhite teachers are also more likely to stay …
Cross-Subsidization Of Teacher Pension Costs: The Impact Of Assumed Market Returns, Robert M. Costrell, Josh B. Mcgee
Cross-Subsidization Of Teacher Pension Costs: The Impact Of Assumed Market Returns, Robert M. Costrell, Josh B. Mcgee
Education Reform Faculty and Graduate Students Publications
It is well-known that public pension plans exhibit substantial cross-subsidies, both within cohorts, e.g. from early leavers to those who retire at the “sweet spot”, and across cohorts, through unfunded liabilities. However, the cross-subsidies within and across cohorts have never been provided in an integrated format. This paper provides such a framework, based on the gaps between normal cost rates for individuals and the uniform contribution rates for the cohort. Since the unfunded liabilities and associated cross-subsidies across cohorts derive from overly optimistic actuarial assumptions, we focus on the historically most important such assumption, the rate of return. We present …