Heterogeneous workers place different valuations on employer-provided pensions, depending upon such factors as the individual's degree of risk aversion, life expectancy, personal rates of time preference, earnings and access to alternative sources of retirement income. As a result, workers with relatively strong preferences for deferred compensation may choose jobs that offer generous pensions. Using primarily experimental data from the first wave of the Health and Retirement Survey, this paper tests the extent to which pension coverage is driven by worker demand. Profit estimates indicate that risk averse workers have significantly higher rates of pension coverage, particularly among those with low earnings. Among workers who recently began their jobs, those expecting to live longer are also more likely to be included in a pension plan. Rates of time preference have a marginally significant impact on pension coverage. There is no evidence that employer pension substitutes for other forms of retirement saving.
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