Author Question: A defined benefit pension plan is designed to retain a worker at the same firm for his or her ... (Read 39 times)

CBme · **on:** Jul 1, 2018

A defined benefit pension plan is designed to retain a worker at the same firm for his or her career.

Indicate whether the statement is true or false

Question 2

The market reliably allocates workers among jobs based on their attitudes toward risk, placing workers more willing to bear risk in riskier jobs.

Indicate whether the statement is true or false

AISCAMPING · **Reply #1 on:** Jul 1, 2018

Answer to Question 1

T The incentive has that effect in that the amount of the defined benefit pension rises considerably as retirement age approaches, and improves very little after that.

Answer to Question 2

F While potentially true, the allocation of the market according to riskiness may not succeed, either because the market does not offer information about job riskiness to a worker or does not offer enough jobs to give a worker a choice, so it doe not serve reliably.