The retirement behavior of workers covered by union and nonunion pension plans

Abstract

Previous authors have noted that there are significant differences between the provisions of union and nonunion pension plans. I present evidence that sheds light on two hypotheses. The first (Parsons, 1983) posits that union pensions should encourage earlier retirement because productivity falls as workers age, but union rules prohibit firms from lowering wages. The second (Freeman, 1985) argues that union pension plans reflect the preferences of older, more senior workers. I find some support for both hypotheses.