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State and Local Retirement Plans in the United States

Robert L. Clark, Professor of Economics and Professor of Management, Innovation and Entrepreneurship, North Carolina State University, US, Lee A. Craig, Alumni Distinguished Professor, Department of Economics, North Carolina State University, US and John Sabelhaus, Federal Reserve Board, US
State and Local Retirement Plans in the United States explains how economic and political events have shaped the development of pension plans in the last century, and it argues that changes in the structure and generosity of these plans will continue to shape policy and funding in the future. It also brings to bear a new rationale to the policies behind public sector pension plans. The authors use the history of how early public pension plans were established, how they matured and how they have grown in generosity to analyse what changes may be expected in years to come. Unique in its scope, this comprehensive history of the development of public sector pension plans in the United States during the twentieth century expands upon current ideas relating to the changing economic environment, the passage and evolution of social security, and the expansion of the public sector.
Extent: 240 pp
Hardback Price: $120.00 Web: $108.00
Publication Date: 2011
ISBN: 978 1 84844 755 4
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  • Economics and Finance
  • Public Sector Economics
  • Social Policy and Sociology
  • Ageing
State and Local Retirement Plans in the United States explains how economic and political events have shaped the development of pension plans in the last century, and it argues that changes in the structure and generosity of these plans will continue to shape policy and funding in the future. It also brings to bear a new rationale to the policies behind public sector pension plans. The authors use the history of how early public pension plans were established, how they matured and how they have grown in generosity to analyse what changes may be expected in years to come. Unique in its scope, this comprehensive history of the development of public sector pension plans in the United States during the twentieth century expands upon current ideas relating to the changing economic environment, the passage and evolution of social security and the expansion of the public sector.

With the exception of military pension plans, which date from the eighteenth century, the first public sector plans, dating from the late nineteenth century, were established to cover teachers, police officers and firefighters in large cities. Over time, these retirement plans were extended to other public sector workers and the local plans were often merged with plans for state workers; all of these date from the twentieth century. Here, the authors show just how pension coverage for public sector workers expanded steadily, through the first half of the twentieth century, so that by the 1960s the vast majority of public sector workers were covered by a plan. This analysis demonstrates how economic events and shifts in public policy at the federal, state and local levels helped to shape public sector retirement plans. The authors also compare public plans with private sector plans, and the final chapter focuses on recent changes in public pensions in response to the ‘Great Recession’, concurrent sharp declines in equity markets and the aging of the public workforce.

Scholars and students of economics, history and public policy, public administrators, policymakers and all those with an interest in policy development will find the analyses discussed and conclusions drawn here of significance.
‘In their recent book State and Local Retirement Plans in the United States, authors Robert L. Clark, Lee A. Craig and John Sabelhaus have provided a valuable and comprehensive history of the development of public pension plans in the 20th century. . . this book represents an important contribution to economists’ historical understanding of state and local pension plans, and I learned a great deal from reading it.’
– Joshua Rauh, Journal of Pension Economics and Finance

‘This book provides a fine source for further research and public discussions about state and local government pension programs. Highly recommended.’
– J.L. Mikesell, Choice
Contents: 1. Public Pension Plans in the Twentieth Century 2. Public Sector Pension Plans on the Eve of the Great Depression 3. State and Local Pension Plans During the Great Depression 4. State and Local Pension Plans and the Evolution of Social Security: 1940–1975 5. Pension Plans for Public School Teachers 6. Maturing State Pension Plans: 1975–2000 7. Maturing Local Pension Plans: 1975–2000 8. Comparing Trends in Public Pensions to Those in the Private Sector 9. Financial Status of Public Sector Retirement Plans 10. Public Pensions in the Twenty-first Century References Index