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<p><p>We measure accruals in defined benefit (DB) pension plans for public and private sector workers in Britain, using typical differences in scheme rules and sector-specific lifetime age-earnings profiles by sex and educational group. We show not just that coverage by DB pension plans is greater in the public sector, but that median pension accruals as a % of salary are almost 5% higher among DB-covered public sector workers than covered private sector workers. This is largely driven by earlier normal pension (retirement) ages. For workers of different ages in the two sectors, marginal accruals also vary as a result of differences in earnings profiles across the sectors. The differences in earnings profiles across sectors should induce caution in using calculated coefficients on wages from cross sections of data in order to estimate sectoral wage effects. </p></p>
Authors
Deputy Director
Carl, a Deputy Director, is an editor of the IFS Green Budget, is expert on the UK pension system and sits on the Social Security Advisory Committee.
Research Associate University of Sussex
Richard is an IFS Research Associate, a Part-time Professor of Economics at the University of Sussex and a Visiting Professor of Economics at UCL.
Gemma Tetlow
Working Paper details
- DOI
- 10.1920/wp.ifs.2007.0717
- Publisher
- IFS
Suggested citation
R, Disney and C, Emmerson and G, Tetlow. (2007). What is a public sector pension worth?. London: IFS. Available at: https://ifs.org.uk/publications/what-public-sector-pension-worth (accessed: 2 May 2024).
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