How have pension cuts affected public sector competitiveness?

Abstract

The brief's key findings are: (1) To improve the funded status of state and local pensions, many plan sponsors have cut benefits, particularly for new hires.(2) Such cuts, without offsetting increases in wages, could potentially make government employment less attractive to workers. (3) The analysis found that workers joining the public sector after benefit cuts had earned less in the private sector than those hired before the cuts. (4) This result suggests that pension cuts may have hurt governments' ability to compete with the private sector for workers.