Do Public Pensions Help Recruit and Retain High-Quality Workers?

The brief’s key findings are:

• Research shows that pensions help recruit and retain high-quality workers; thus, cutbacks in public pensions could hurt worker quality.

• One indicator of quality is the wage that a worker can earn in the private sector.

• Using this measure, states and localities consistently have a “quality gap” – the workers they lose have a higher private sector wage than those they gain.

• The analysis shows that jurisdictions with relatively generous pensions have smaller quality gaps, meaning they can better maintain a high-quality workforce.

• The bottom line is that states and localities should be cautious about scaling pensions back too far.