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Labour Unemployment Insurance and Pension Asset Allocations

Yina Liang Orcid Logo, Paraskevi Vicky Kiosse, Monika Tarsalewska Orcid Logo

British Journal of Management, Pages: 1 - 16

Swansea University Author: Yina Liang Orcid Logo

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Abstract

This paper examines the effect of unemployment risk on pension investment decisions of defined benefit pension plans. In particular, we examine whether unemployment insurance benefits affect pension investment risk. Using fixed‐effects and difference‐in‐difference analyses, we find evidence that fir...

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Published in: British Journal of Management
ISSN: 1045-3172 1467-8551
Published: Wiley 2024
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URI: https://cronfa.swan.ac.uk/Record/cronfa68377
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spelling 2025-02-04T12:44:53.2664830 v2 68377 2024-11-28 Labour Unemployment Insurance and Pension Asset Allocations 58a1d9e1dac57dc95fc1d126f290c0a4 0009-0003-7341-2233 Yina Liang Yina Liang true false 2024-11-28 CBAE This paper examines the effect of unemployment risk on pension investment decisions of defined benefit pension plans. In particular, we examine whether unemployment insurance benefits affect pension investment risk. Using fixed‐effects and difference‐in‐difference analyses, we find evidence that firms take higher pension investment risk by investing more heavily in equities after unemployment insurance benefit increases. These results are consistent with the notion that firms undertake more risk when the costs of unemployment decrease. The findings are robust to a number of sensitivity tests, including a falsification test to examine the timing of the relationship between the riskiness of the pension portfolio and unemployment insurance benefits, a 3‐year window, alternative matching methods and removing firms that operate in geographically dispersed industries. Additional analyses suggests that the findings are more pronounced for firms with skilled labour and high labour intensity, while they are less pronounced when the risk of layoffs is high, in less competitive industries and highly unionized firms. Journal Article British Journal of Management 0 1 16 Wiley 1045-3172 1467-8551 22 11 2024 2024-11-22 10.1111/1467-8551.12881 COLLEGE NANME Management School COLLEGE CODE CBAE Swansea University Another institution paid the OA fee 2025-02-04T12:44:53.2664830 2024-11-28T15:09:37.8507312 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Yina Liang 0009-0003-7341-2233 1 Paraskevi Vicky Kiosse 2 Monika Tarsalewska 0000-0003-4278-5697 3 68377__32998__2d4d84201aad43d6b34f6decbceedf7e.pdf 1467-8551.12881.pdf 2024-11-28T15:09:37.8289886 Output 362672 application/pdf Version of Record true © 2024 The Author(s). This is an open access article under the terms of the Creative Commons Attribution License (CC BY 4.0). true eng http://creativecommons.org/licenses/by/4.0/
title Labour Unemployment Insurance and Pension Asset Allocations
spellingShingle Labour Unemployment Insurance and Pension Asset Allocations
Yina Liang
title_short Labour Unemployment Insurance and Pension Asset Allocations
title_full Labour Unemployment Insurance and Pension Asset Allocations
title_fullStr Labour Unemployment Insurance and Pension Asset Allocations
title_full_unstemmed Labour Unemployment Insurance and Pension Asset Allocations
title_sort Labour Unemployment Insurance and Pension Asset Allocations
author_id_str_mv 58a1d9e1dac57dc95fc1d126f290c0a4
author_id_fullname_str_mv 58a1d9e1dac57dc95fc1d126f290c0a4_***_Yina Liang
author Yina Liang
author2 Yina Liang
Paraskevi Vicky Kiosse
Monika Tarsalewska
format Journal article
container_title British Journal of Management
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container_start_page 1
publishDate 2024
institution Swansea University
issn 1045-3172
1467-8551
doi_str_mv 10.1111/1467-8551.12881
publisher Wiley
college_str Faculty of Humanities and Social Sciences
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hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str School of Management - Accounting and Finance{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Management - Accounting and Finance
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description This paper examines the effect of unemployment risk on pension investment decisions of defined benefit pension plans. In particular, we examine whether unemployment insurance benefits affect pension investment risk. Using fixed‐effects and difference‐in‐difference analyses, we find evidence that firms take higher pension investment risk by investing more heavily in equities after unemployment insurance benefit increases. These results are consistent with the notion that firms undertake more risk when the costs of unemployment decrease. The findings are robust to a number of sensitivity tests, including a falsification test to examine the timing of the relationship between the riskiness of the pension portfolio and unemployment insurance benefits, a 3‐year window, alternative matching methods and removing firms that operate in geographically dispersed industries. Additional analyses suggests that the findings are more pronounced for firms with skilled labour and high labour intensity, while they are less pronounced when the risk of layoffs is high, in less competitive industries and highly unionized firms.
published_date 2024-11-22T10:20:12Z
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