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RESEARCH DIALOGUEIssue no. 99JANUARY 2011
PENSIONS AND PUBLIC SCHOOL TEACHER RETIREMENTAN ANALYSIS USING NATIONAL TEACHER DATA
Leora Friedberg
University of Virginia and TIAA-CREF
Sarah Turner
University of Virginia and NBER
ABSTRACT
The views and opinions in this paper are solely those of the authors a
do not necessarily represent those of TIAA-CREF or the TIAA-CREF Institu
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1. INTRODUCTION
1 Costrell and Podgurskys (2009) survey on teacher retirement notes only one published econometric study on teacher pensions and turnover
(Ferguson et al 2006).
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2.1 MEASURING DB PENSION ACCRUALS
jtr~
NRA
tb
tY
actuarially fair.
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tY
tY
r~
2.2 ESTIMATING THE EFFECT OF DB PENSION WEALTH ACCRUALS ON RETIREMENT
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2.3 DB PENSIONS AND TEACHER RETIREMENT
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2.4 TEACHER STAFFING ISSUES
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3. EMPIRICAL APPROACH
3.1 ECONOMETRIC SPECIFICATION
Rit
1PV
it
2PV0
it
3job satisfaction
it
4PV
it*job satisfaction
it
5
PV0it
*job satisfactionit
6B
it
7personal characteristics
it
8year
t
it
10
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3.2 TEACHER DATA
3.3 PENSION PLAN DATA
11
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4. ESTIMATION RESULTS
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5. CONCLUSIONS
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REFERENCES
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TABLE 1: SAMPLE STATISTICS, SCHOOLS AND STAFFING SURVEY OF 1999 AND 2003 AND
TEACHER FOLLOW-UP SURVEY OF 2000 AND 2004
1999-2000 2003-2004
MEAN STD. DEV. MEAN STD. DEV.
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TABLE 2: OLS REGRESSION RESULTS
DEPENDENT VARIABLE: 1 IF TEACHER RETIRES, 0 IF TEACHERS CONTINUES WORKING
2000 LEAVERS 2004 LEAVERS
(1) (2) (3) (4)
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FIGURE 1
PENSION WEALTH AND ACCRUAL UNDER THE TEACHER RETIREMENT SYSTEM OF TEXAS
PANEL A: PENSION WEALTH
PANEL B: PENSION WEALTH ACCRUAL
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FIGURE 2
PENSION WEALTH AND ACCRUAL UNDER A DEFINED BENEFIT AND DEFINED CONTRIBUTION PLAN FROM THE HRS
PANEL A: PENSION WEALTH
PANEL B: PENSION WEALTH ACCRUAL
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FIGURE 3
AGE DISTRIBUTION OF ELEMENTARY AND SECONDARY SCHOOL TEACHERS
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FIGURE 4
THE AGE DISTRIBUTION OF THOSE WHO STAY IN THEIR JOB (STAYERS) AND THOSE WHO RETIRE (LEAVERS)
IN OUR TFS SAMPLE.
A: 2000 TFS
B. 2004 TFS
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FIGURE 5. PERCENTAGE OF TEACHERS WHO STAY IN THEIR JOB (STAYERS) AND WHO RETIRE (LEAVERS)
IN OUR TFS SAMPLE, BY SATISFACTION LEVELS
A: 2000 TFS
B: 2004 TFS
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A: TEACHER HIRED AT AGE 23 IN GEORGIA
C: TEACHER HIRED AT AGE 30 IN NEW YORK
E: TEACHER HIRED AT AGE 30 IN TEXAS
B: TEACHER HIRED AT AGE 30 IN GEORGIA
D: TEACHER HIRED AT AGE 30 IN MICHIGAN
F: TEACHER HIRED AT AGE 40 IN TEXAS
FIGURE 6
PENSION WEALTH IN SELECTED STATES FOR HYPOTHETICAL TEACHERS
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A. MASSACHUSETTS
C. ALABAMA
B. VIRGINIA
D. OHIO
FIGURE 7
DISTRIBUTION OF PENSION PEAK VALUE, OBSERVED FOR TEACHERS IN SELECTED STATES IN THE SASS