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- Title
Political Effects on Pension Underfunding.
- Authors
Elder, Erick M.; Wagner, Gary A.
- Abstract
Pension underfunding in the public sector has received considerable attention recently and is often cited as the next looming crisis. The majority of recent research has focused on appropriately measuring the underfunding. In this paper, we employ a political economy framework to show that increases in partisan polarization and electoral uncertainty lead to greater underfunding. Using an unbalanced panel of individual pension plans, we find robust empirical evidence that higher legislative turnover rates, more electoral competition, and term limits all lead to more pension underfunding. The political environments of state and local governments play a pivotal role in pension underfunding.
- Subjects
UNDERFUNDED pension plans; PENSION financing; PUBLIC sector; PUBLIC Sector Pension Investment Board (Company); ECONOMICS; PRACTICAL politics
- Publication
Economics & Politics, 2015, Vol 27, Issue 1, p1
- ISSN
0954-1985
- Publication type
Article
- DOI
10.1111/ecpo.12048