How Does the Market Value Unfunded Pension Liabilities? / Jeremy I. Bulow, Randall Morck, Lawrence H. Summers.

Format:

Book

Author/Creator:

Bulow, Jeremy I.

Contributor:

National Bureau of Economic Research.

Morck, Randall.

Summers, Lawrence H.

Series:

Working Paper Series (National Bureau of Economic Research) no. w1602.

NBER working paper series no. w1602

Language:

English

Subjects (All):

Pension trusts--Investments.

Pension trusts.

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1985.

Cambridge, Massachusetts : National Bureau of Economic Research, 1985.

Summary:

We lead off by discussing a number of theoretical reasons for expecting various relationships between a firm's unfunded pension liability and its market value. We then discuss our doubts about the methodology of earlier papers which studied the empirical relation between funding and market value using standard cross sectional techniques. A modified cross sectional approach which alleviates some of these doubts, and a variable effect event study methodology which alleviates most of them are both employed to investigate the issues raised in the first part of the paper. Our conclusion confirms those of earlier studies that unfunded pension liabilities are accurately reflected in lower share prices.

Notes:

Print version record

April 1985.