Employer-Provided Benefit Plans, Workforce Composition and Firm Outcomes

LEHD Technical Paper No. TP-2003-06

44 Pages Posted: 3 Jan 2005

See all articles by Anja Decressin

Anja Decressin

Department of Labor

Julia Lane

Wagner Graduate School of Public Service; Institute for the Study of Labor (IZA)

Kristin McCue

Johns Hopkins University

Martha Harrison Stinson

Government of the United States of America - Bureau of the Census

Date Written: December 2004

Abstract

What do firms gain by offering benefits? Economists have proposed two payoffs: (i) benefits may be a more cost-effective form of compensation than wages for employees facing high marginal tax rates, and (ii) benefits may attract a more stable, skilled workforce. Both should improve firm outcomes, but we have little evidence on this matter. This paper exploits a rich new dataset to examine how firm productivity and survival are related to benefit offering, and finds that benefit-offering firms have higher productivity and higher survival rates. Differences in firm and workforce characteristics explain some but not all of the differences in outcomes.

Keywords: Pensions, benefits, firms, productivity, matched employer-employee data

JEL Classification: J32, J33, l23, l20

Suggested Citation

Decressin, Anja and Lane, Julia and McCue, Kristin and Harrison Stinson, Martha, Employer-Provided Benefit Plans, Workforce Composition and Firm Outcomes (December 2004). LEHD Technical Paper No. TP-2003-06 , Available at SSRN: https://ssrn.com/abstract=638482 or http://dx.doi.org/10.2139/ssrn.638482

Anja Decressin (Contact Author)

Department of Labor ( email )

Frances Perkins Building
200 Constitution Ave., NW
Washington, DC 20210
United States
202-693-8417 (Phone)

Julia Lane

Wagner Graduate School of Public Service ( email )

The Puck Building
295 Lafayette Street, Second Floor
New York, NY 10012
United States

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://www.iza.org

Kristin McCue

Johns Hopkins University

Baltimore, MD 21218
United States

Martha Harrison Stinson

Government of the United States of America - Bureau of the Census ( email )

4600 Silver Hill Road
Washington, DC 20233
United States

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