Pension Portability & Labor Mobility: Evidence from SIPP

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Working Paper Number: SIPP-WP-120

This paper investigates whether a lack of pension portability is primarily responsible for the low job mobility rates observed for pension covered workers. Using the Survey of Income and Program Participation (SIPP), the analysis develops evidence which casts doubt on non-portability as the primary culprit for these low mobility rates. Instead, the evidence is consistent with an alternative view, that pension covered jobs offer higher levels of compensation than workers can obtain elsewhere, an it is this compensation premium, rather than non-portability, that accounts for lower turnover among workers covered by pensions. These results have implications for legislation addressing perceived problems associated with pension portability, and these implications are also explored.

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