Journal of Labor Research

, Volume 22, Issue 3, pp 615–634 | Cite as

Complementarity of pensions and training under multiemployer plans

  • Teresa Ghilarducci
  • Michael Reich

Abstract

We compare firmoptimizing and institutional models of labor contracts to investigate how different types of pension plans affect employee training. Unlike previous stud-ies, we consider an expanded voice model of training and pension coverage in which worker and union preferences feed back on firm decisions, and we test for this bidi-rectional causality between pensions and training. A standard view is that firms pro-vide pensions to optimize their training costs. However, when pension coverage is treated as endogenous in a twostage least squares regression (the data are merged 1991 CPS samples), pensions have a negative effect on training. In contrast, when the pension is a definedbenefit, multiemployer plan, training and pensions are comple-ments, consistent with both optimizing and institutional models.

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Copyright information

© Springer 2001

Authors and Affiliations

  • Teresa Ghilarducci
    • 1
  • Michael Reich
    • 2
  1. 1.University of Notre Dame
  2. 2.University of CaliforniaBerkeley

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