Company Pension Plans, Stock Market Returns, and Labor Demand

November 1, 2003

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

With asset values falling sharply in recent years, many companies around the world are under pressure to restore the solvency of their defined-benefit pension plans. Will this lead to higher contributions? Will higher contributions increase labor costs and reduce employment? Does this mechanism exacerbate economic downturns? What are the economic effects of pension fund regulation? This paper develops a theoretical model to address these questions. Although its scope is more general, the model captures the main institutional features of the pension system in the Netherlands, a country where the economic effects of the pension shock are widely debated.

Subject: Expenditure, Labor, Labor costs, Labor demand, Pension spending, Pensions, Wages

Keywords: company pension funds, Company pension plans, company plan, coverage ratio, Global, Labor costs, labor demand, member company, Netherlands, pension regulation, Pension spending, Pensions, sponsoring company, Wages, WP

Pages:
19
Volume:
2003
DOI:
https://doi.org/10.5089/9781451875287.001
Issue:
222
Series:
Working Paper No. 2003/222
Stock No:
WPIEA2222003
ISBN:
9781451875287
ISSN:
1018-5941

IMF’s Work

RESOURCES

TOPICS

Flagship Publications

Other Publications

IMF reports and publications by country

Regional Offices

All News

See Also

For Journalists

Press Center

RESOURCES

FLAGSHIPS

KEY SERIES

IMF NOTES

Loading component...

IMF Working Papers