Stayers as "Workers" and "Savers": Toward Reconciling the Pension-Quit Literature

The classic selection effect posits that deferred wages attract "stayers." The results in this paper suggest an alternative explanation. Deferred wage contracts attract "savers." All else constant, savers are better workers than nonsavers. A firm naturally works harder to retain...

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Bibliographic Details
Published in:The Journal of human resources 2002-04, Vol.37 (2), p.275-308
Main Author: Ippolito, Richard A.
Format: Article
Language:English
Subjects:
Age
Buyouts
Comparative studies
Defined benefit pension plan
Employee pension plans
Government employees
Human resources
Old age benefits
Pension plans
Private pensions
Probability
Quit rates
Resignations
Wages
Wages & salaries
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Summary:The classic selection effect posits that deferred wages attract "stayers." The results in this paper suggest an alternative explanation. Deferred wage contracts attract "savers." All else constant, savers are better workers than nonsavers. A firm naturally works harder to retain better workers, and thus, is led to pay them higher wages; thereby encouraging savers to remain in the firm's employ. This process creates a confluence of deferred wages, high levels of compensation and low quit propensities. In this explanation, "staying" is merely the result of a selection process, and not the underlying factor that drives selection.
ISSN:0022-166X
1548-8004
DOI:10.2307/3069648