Our results on mobility are mixed. The DD model shows that the pension reform has a negative effect on mobility. The mobility probability decrease by 0.021, 0.02, 0.019, 0.022 and 0.029 percentage point in full, male, female, married and single samples, respectively. Similarly, the tenure significantly increases by 1.08, 1.25, 0.70, 1.09, and 0.51 years after 2005 in full sample, male, female, married and single sample, respectively. The positive effect on tenure implies that the pension reform has not reduced the job-lock effect.
On the other hand, using DDD model, our results show that the 2005 pension reform has positive effect on mobility. The mobility probability increases by 0.011 percentage point for age less than 45 young workers. Similarly, the tenure decreases by 0.82, 1.11 and 1.59 years for age less than 45, 50 and 55 young workers, respectively. Both results indicate that workers are more likely to change jobs after
27
2005 pension reform. Our results support the hypothesis that the 2005 pension reform significantly increases the mobility for the private-sector workers as opposed to public-sector workers. The results from the DDD are preferred to the DD ones because it removes the unobserved heterogeneity between the treatment and comparison groups. Our results suggest that the reform has positive but small effect on job mobility.
This article also makes an improvement upon Luoh and Yang’s study by using DDD approach. Consistent with Lou and Yang’s fining, we find that the new pension policy has a negative effect on wage. However, our results show that the 2005 reform only reduce the wages by 3% and 2.8% for workers whose tenure is less than 15 and 20 years, respectively. The result suggests that employers can only shift half of the pension cost to workers and the labor supply is not perfect inelastic which is consistent with Vestad (2011) and Sheu and Lee (2012) finding. This paper is our first attempt to examine the effect of newly implemented pension program. Future research can focus on the effect of the 2005 reform on personal saving, consumption and long-term income (wage) inequality.
28
Reference
Adams, S. J. (2004), “Employer-Provided Health Insurance and Job Change, ”
Contemporary Economics Policy, 22(3), 357-369.
Andrietti, V. and V. Hildebrand (2001), “Pension Portability and Labour Mobility in the United States. New Evidence from SIPP Data, ” CeRP Working Papers , No.10.
Abraham, J. and S. Lluis (2008), “Compensating Differentials and Worker Selection of Fringe Benefits: Evidence from the Medical Expenditure Panel Survey
1997-2004,” University of Waterloo, Department of Economics Working Paper No.
8012
Bodie, Z., A. J. Marcus and R. C. Merton (1985), “Defined Benefits versus Defined Contribution Pension Plans: What are the Real Tradeoffs,” NBER working paper 1719.
Blundell, R, C. Meghir and S. Smith (2002), “Pension Incentives and the Pattern of Early Retirement,” The Economic Journal, 112(478), C153-C170
Berkel, B. and A. Börsch-Supan (2003), “Pension Reform in Germany: The Impact on Retirement Decisions,” NBER working paper 9913.
Berger, M.C., D. A. Black and F. A. Scott (2004), “Is There Job Lock? Evidence from the Per-HIPAA Era ,” Southern Economics Journal, 70(4),953-976.
Cornelissen, T and K. Sonderhof (2009), “Partial Effects in Probit and Logit Models with a Triple Dummy Variable Interaction Term, ” Stata Journal, 9(4), 571-583.
Disney, R. and C. Emmerson (2002), “Choice of Pension Scheme and Job Mobility in Britain, ” IFS Working Papers, No.W02/09.
Dey, M. S. and C. J. Flinn (2005), “An Equilibrium Model of Health Insurance Provision and Wage Determination,” Econometrica, 73(2), 571-627.
29
Dey, M. and C. Flinn (2005), “Health Insurance and the Household Search,”
Economics Research Initiative on the Uninsured Working Paper 50.
Friedberg, L. and A. Webb (2003), “Retirement and the Evolution of Pension Structure,” NBER working paper 9999.
Gruber, J. and M. Hanratty (1993), “The Labor Market Effects of Introducing National Health Insurance: Evidence from Canada, ” NBER Working Paper, No.
4589.
Gustman, A. L. and T. L. Steinmeier (1993), “Pension Portability and Labor Mobility Evidence from the Survey of Income and Program Participation, ”Journal of Public
Economics, 50(3), 299-323.
Gruber, J. and B. C. Madrian (1994), “Health Insurance and Job Mobility: The Effects of Public Policy on Job- Lock, ” Industrial and Labor Relations Review, 48(1), 86-102.
Gruber, J. and B. C. Madrian (1997), “Employment Separation and Health Insurance Coverage, ” Journal of Public Economics, 66, 349-82.
Gruber, J. (1998), “Health Insurance and the Labor Marker,” NBER working paper
6762.
Gruber, J and B.C. Madrian (2002), “Health Insurance, Labor Supply, and Job Mobility: A Critical Review of the Literature,” NBER Working Paper, No. 8817.
Hernaes, E., J. Piggott, O. Vestad and T. Zhang (2011), “Labour Mobility, Pension Portability and the Lack of Lock-In Effect.” Australian School of Business Research Paper No. 2011 AIPAR 01
Inkmann, J. (2006), “Compensating Wage Differentials for Defined Benefit and Defined Contribution Occupational Pension Scheme Benefits,” Financial Markets
30
Group, London School of Economics and Political Science.
Jensen, G. A. and M. A. Morrisey (2001), “Endogenous Fringe Befits, Compensating Wage Differentials and Older Workers,” International Journal of Health Care
Finance and Economics, 1(3/4), 203-226.
Kan, K.-H. and Y.-L. Lin (2009), “The Labor Market Effects of National Health Insurance Evidence from Taiwan, ”Journal of Population Economics, 22(2), 311-350.
Luoh, M.-C and T.-T Yang (2009), “Who Pays Pensions? The Impact of New Labor Pension Scheme on Labor Wages.” Taiwan Economic Review, 37(3), 339-368
Mitchell, O.S. (1982), “Fringe Benefits and Labor Mobility, ” The Journal of Human
Resources, 17(2), 286-298.
Madrian, B.C. (1994), “Employment-Based Health Insurance and Job Mobility: Is There Evidence of Job-Lock?” The Quarterly Journal of Economics, 109(1), 27-54.
Monheit, A. C. and P. F. Cooper (1994), “Health Insurance and Job Mobility: Theory and Evidence, ” Industrial and Labor Relations Review, 48(1), 68-85.
Mealli, F. and S. Pudney (1996), “Occupational Pension and Job Mobility in Britain:
Estimation of a Random-Effects Competing Risks Model, ” Journal of Applied
Economics, 11(3), 293-320.
Munnell, A. H., K. Haverstick, and G. Sanzenbacher (2006), “Job Tenure and Pension Coverage, ” CRR Working Paper, No. 2006-18.
Olson, C. A. (2002), “Do workers Accept Lower Wages in Exchange for Health Benefits?” Journal of Labor Economics, 20(2), s91-s114.
31
Okunade, A.A. and P.V. Wunnava (2002), “Availability of Health Insurance and Gender Differences in “Job-Lock” Behavior: Evidence from NLSY,” Journal of
Forensic Economics, 15,195-204.
Olsen, H. D. (2006), “Wages, Fringe Benefits and Worker Turnover,” Labour
Economics, 13(1), 87-105.
Pesando, J. E., M. Gunderson and J. McLaren (1991), “Pension Benefits and Male-Female WageDifferentials,” The Canadian Journal of Economics, 24(3), 536-550.
Pierce, B. (2001), “Compensation Inequality,” The Quarterly Journal of Economics, 116(4), 1493-1525.
Rogowski, J. A. and L. A. Karoly (2000), “Health Insurance and Retirement Behavior:
Evidence from the Health and Retirement Survey,” Journal of Health Economics, 19, 529-539
Rabe, B. (2004), “Occupation Pensions and Job Mobility in Germany.” ISER Working
Paper 2006–4
Rashad, I. and E. Sarpong (2006), “Employer-Provided Health Insurance and the Incidence of “Job-Lock”: Is There a Consensus, ” Andrew Young School of Policy
Studies Research Paper, No. 06-53.
Smith, R. S. and R. G. Ehrenberg (1981) “Estimating Wage-Fringe Trade-Offs: Some Date Problems,” NBER working paper 827.
Simon, K. I. (2001), “Displaced Workers and Employer-Provided Health Insurance:
Evidence of a Wage/Fringe Benefit Tradeoff?” International Journal of Health
Care Finance and Economics, 1(3/4), 249-271.
32
Samwick, A. A. and J. Skinner (2004), “How Will 401(k) Pension Plans Affect Retirement Income?” The American Economic Review, 94(1), 329-343.
Sommers, B. D. (2005), “Who Really Pays for Health Insurance? The Incidence of Employer-Provided Health Insurance with Sticky Nominal Wages,” International
Journal of Health Care Finance and Economics, 5(1), 89-118.
Sanz de Galdeano, A. (2006), “Job-Lock and Public Policy: Clinton’s Second Mandate, ” Industrial and Labor Relations Review , 59(3), 430-437.
Vestad, O. L. (2011)., “Who pays for Occupational Pensions? ” University of Oslo,
Department of Economics Memorandum No. 16/2011
Woodbury, S. A. (1983), “Substitution between Wage and Nonwage Benefits, ” The
American Economic Review, 73(1), 166-182.
Sheu, S.-J. and Y.-Y. Lee (2012), “The Effect of National Health Insurance and New Labor Pension Scheme on Wage Rates in Taiwan,” University of National Taipei,