Although existing research on pension coverage focuses on individual current-job coverage, household pension coverage may be the more appropriate measure of coverage for policy debates. The authors analyze the joint pension coverage decision of households. Using data from Panel Study of Income Dynamics for the years 1984 and 1989, the authors find that spousal coverage on the current job appears to be complementary to own current coverage for both husbands and wives. Husbands and wives have a number of economic variables in common, in particular family income and marginal income tax rates. Our estimates suggest that inclusion of a tax variable based on family income explains most of the complementarity in coverage. Household coverage rates greatly exceed individual current-job coverage rates. This suggests that the usual emphasis in policy discussions on individual current-job coverage rates paints a far bleaker picture of future pension income than is likely to be received.
Pension Coverage Decision of Households: An Analysis Using the Panel Study of Income Dynamics
1994
38 pages
Report
No indication
English
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