Wharton Pension Research Council Working Papers

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Working Paper

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The financial market crisis has prompted policymakers to devote substantial attention to ways in which capital market risks shape pension performance, but few analysts have asked how shocks to human capital shape retirement wellbeing. Yet human capital risks due to fluctuations in labor earnings, employment volatility, and survival, can have a profound influence on pension accumulations and payouts. This paper reviews existing studies and offers a framework to think about how human capital risk can influence pension outcomes. We conclude with thoughts on how future analysts can better assess sensitivity of pension plan outcomes to a labor income uncertainty.

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Copyright/Permission Statement

Opinions and conclusions are solely those of the author(s) and do not reflect views of the institutions supporting the research, with whom the authors are affiliated, or the Pension Research Council. Copyright 2009 © Pension Research Council of the Wharton School of the University of Pennsylvania. All rights reserved.


This paper was prepared for the World Bank/OECD/ING/BBVA/VB volume on Performance of Privately Managed Pension Funds. The authors acknowledge helpful comments from Karen Ferguson, Richard Hinz, and Heinz Rudolph.

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Date Posted: 23 August 2019