Pension Obligations: A Threat to Fiscal Stability?

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Abstract/Contents

Abstract: Using state pension data from 2001-2011, this paper explores the relationship between unfunded liabilities and demographic, fiscal, and political variables. Many have blamed the current decline in pension funding on poor market returns during the Great Recession and the “.com” bubble before that. Others claim that pension funds are just poorly managed. While the latter may be true, I show that investment returns cannot fully account for the change in funding ratio. In fact the mean compound return over this time period stands in stark contrast to the decline in the mean funding ratio. I argue that political and legal factors are responsible for inadequate contributions to pension funds. Furthermore, I show that pension funding is correlated with state debt and many categories of state spending.

Type of resource	text
Date created	May 2014

Author	Davis, Cole W.
Primary advisor	Boskin, Michael
Degree granting institution	Stanford University, Department of Economics

Subject	public pensions
Subject	unfunded liabilities
Subject	state government
Subject	politics
Subject	debt
Subject	finance
Subject	investment
Subject	Stanford Department of Economics
Genre	Thesis

Location	https://purl.stanford.edu/mw550wm3401

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Preferred Citation: Davis, Cole W. (2014). Pension Obligations: A Threat to Fiscal Stability?. Stanford Digital Repository. Available at: https://purl.stanford.edu/mw550wm3401

Stanford University, Department of Economics, Honors Theses

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