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Politics, Fiscal Necessity, or Both? Factors Driving the Enactment of Defined Contribution Accounts for Public Employees

Authors


  • Michael Thom is assistant teaching professor in the Price School of Public Policy at the University of Southern California. His research interests include public sector pensions, intergovernmental relations, and social welfare policy. This is his first contribution to Public Administration Review. E-mail: mdthom@usc.edu

Abstract

Recent conflicts over public sector defined benefit pension funding have inspired polarized debates about the need for reform, including the utility of replacing pensions with defined contribution accounts, which are popular throughout the private sector. Between 1996 and 2011, 15 American states enacted legislation to implement either mandatory or optional defined contribution accounts for certain public employees. What drove this process? This article investigates the role of political, budgetary, and contagion influences on the diffusion of defined contribution accounts for general state employees. Empirical results suggest that enactments were influenced by Republican legislative, but not executive, partisanship. Gains in state indebtedness also increased the likelihood of enactment independent of political and other factors. There is no evidence of policy learning based on neighboring state activity and no influence from two measures of organized labor power. Both quantitative and qualitative robustness checks largely reinforce these findings.

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