THE POLITICAL-ECONOMY OF PUBLIC-PRIVATE COMPENSATION DIFFERENTIALS - THE CASE OF FEDERAL PENSIONS

• 成果类型: Article
• 署名作者: National Bureau of Economic Research
• 刊物名称: JOURNAL OF ECONOMIC HISTORY
• ISSN/ISSBN: 0022-0507
• DOI: 10.1017/S0022050700041073
• 发表日期: 1995
• 页码: 304-320
• 关键词: Retirement

摘要

Numerous empirical studies indicate that, as a result of rent-seeking behavior, public-sector workers are overcompensated relative to their private-sector counterparts, with pensions representing part of the difference. I present a history of the Federal Employees Retirement Act of 1920 and show that rent seeking by federal workers cannot explain several features of the act. Instead, I argue that the act represented an optimal incentive contract between Congress and civil service employees in which civil servants accepted mandatory retirement and a compensating wage differential in exchange for the federal pension plan.