Journal of Economics and Economic Education Research (Print ISSN: 1533-3590; Online ISSN: 1533-3604)

Abstract

Do Defined Benefit Pensions Create Monopsony Power Evidence From The Academic Labour Market

Author(s): Kevin Neuman, Scott Wallace

This paper analyses the relationship between compensation mix and monopsony power across universities within the US academic labour market. Using data from the AAUP supplemented by pension information from institutions, we find an overall 8.4% reduction in total compensation for faculty with DB pensions relative to having a DC pension. We also find different effects by rank. Assistant professors with DB pensions make 5.7% less, associate professors make 9.9% less and full professors make 9.6% less than their counterparts with DC pensions. This negative effect is particularly strong for faculty in masters granting institutions.