The Diffusion of State Teacher Pension Privatization in the United States

Total compensation is divided into current and deferred elements. Deferred portions are mainly composed of pensions and health benefits to which an employee is entitled upon retirement. Early pensions were designed to provide income security through a stream of payments, guaranteed by the employer, from when an individual ceased work until death. Beginning in the 1970s, other nations and U.S. private employers moved away from these defined benefit plans to individualized accounts, shifting income burdens and risks onto the employee, most public pensions retained the original structure. This is especially true for teacher plans. However, between 2000 and 2017, twelve states structurally reformed their plans. To understand why these states ratified reforms, I employ event history analysis in a unified model to identify the internal and external determinants that predict the probability of change. Constructing a dataset from a myriad of state and national sources, I examine the political, economic, and social factors that influence teacher pension policy diffusion across the legislative process, from introduction through final signing. I find that political factors, economic forces, plan attributes, and external mechanisms all influence a state’s decision to pursue and enact pension reform, although in different ways through the various stages of the process. In the current economic climate, with states and public pension plans facing ballooning deficits, and the focus on teacher quality and compensation, understanding these predictors provides researchers and policy-makers with a better understanding of when, how, and why the deferred aspect of teacher compensation may change. This understanding can help design complete compensation structures to attract and retain high-quality individuals into the teaching profession.Doctor of Philosoph