Conference Agenda

This paper examines the relative compensation of state and local government workers compared to their private sector counterparts in the U.S. Augmenting standard data sources on compensation with information on benefits derived from unpublished Bureau of Labor Statistics data and asset-based methodologies for valuing benefits, we document a significant erosion in the public sector compensation premium. While state and local workers received approximately 10 percent higher total compensation than comparable private sector workers in 2011, this differential had declined to negative 5 percent by 2023. This decline stems from multiple factors: relative public sector wages have fallen steeply, public sector retiree health care benefits have diminished, and the historically greater job stability in government employment has eroded. We also document that cash, as opposed to accrual, accounting for defined benefit pensions significantly skews the trend in relative public sector compensation in the ECI—the principal data on U.S. benefit compensation.

Public pension systems often retain voluntary participation margins even under broad mandatory coverage. This paper examines whether voluntary enrollment in South Korea’s National Pension System responds to local participation prevalence and social interaction environments. Using municipality-level panel data from 2000 to 2017, we exploit legally mandated workplace-based coverage as a source of institutional variation and estimate fixed-effects instrumental-variable models. The results show that employment-induced increases in total pension participation are associated with higher voluntary enrollment, consistent with a social-reference mechanism. Local social-contact infrastructure—private tutoring institutes, kindergartens, and household structure—is also positively associated with voluntary take-up, suggesting a role for information diffusion. Gender-specific estimates indicate stronger level responses among women. Overall, the findings suggest that contributory public pension participation is shaped not only by formal rules and financial incentives but also by socially mediated norms and information environments.

This paper explores the potential impacts on European economies transitioning from an ageing society, where longer lives strain public finances, to a longevity society characterised by prolonged productivity. In a heterogeneous-agent overlapping generations model, we show that raising the pension age together with increased labour market participation among older adults yields significant fiscal benefits in Germany, Spain, and Sweden, permitting a reduction in the consumption tax rate of between 3 and 5 percentage points. Our research sheds light on how longevity-focused policies can serve as a guide for fiscal resilience amid demographic transitions.

To curb the rising costs of disability insurance (DI) programs, some countries have implemented partial DI programs, which require recipients to work part time to receive benefits. However, the welfare implications of such programs remain unclear. The analysis in this paper is twofold. First, we introduce a conceptual framework that identifies the central tradeoffs between partial DI programs, full DI programs, and ordinary employment. Second, we study a reform in Denmark that expanded the Danish partial DI program. We find that the reform substantially altered selection into the program by shifting individuals who would otherwise have entered the full DI program into the partial DI program. At the same time, we find no evidence of negative selection from ordinary employment. However, existing partial DI participants work fewer hours when starting new spells, suggesting that imperfect screening entails efficiency costs.