During the 1970s, defined benefit pension plans increased their liabilities by giving benefit increases to persons no longer working even though almost none of the plans were required to do so by any legally enforceable contract. Our model of these adjustments has workers and firms agreeing to...

A well-known, if underappreciated, finding in the mobility literature is that turnover is much lower in jobs covered by pensions than in other jobs. This could result from capital losses for job changes created by most benefit formulas, the tendency of turnover-prone individuals to avoid jobs...