THE EFFECT OF NON-VESTED PENSIONS ON MOBILITY: A STUDY OF THE HIGHER EDUCATION INDUSTRY.

To make a cross-section analysis of the mobility (herein defined as voluntary separations) of employees in firms with vested as contrasted to employees in firms with non-vested pension plans in the higher education industry, one needs (1) data to classify pension plans in American colleges and universities according to the extent of vesting; (2) data on the voluntary separation rates of faculty, by institution; and (3) data to standardize the sample-that is, to hold "constant" the impact on voluntary separation rates of factors other than the extent of vesting. This article aims to determine whether non- vested pension plans deter voluntary employee movement. The higher education industry was studied because it was unique among manufacturing and non-manufacturing industries in that there was an almost equal division of firms having vested and non-vested pension plans; thus it was possible to make a cross-section analysis of the effect of vesting on mobility. It seems that faculty, in the aggregate, are not very different from industrial workers, in the aggregate, with respect to the decision to resign from their job; neither group seems to allow their mobility decisions to be influenced by losses in pension plan equities. This study also shows, however, that the aggregate data may conceal the differential effects that non-vested pension systems may have on the mobility of particular groups of employees. It may be suggested that, if the aggregate data on industrial workers were subdivided by occupation, similar differential effects would be observed.