01/05/2000

Will Defined Contribution Pension Plans ReallyEncourage Labor Mobility?

Masaharu Usuki 

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1.Introduction

The introduction of a defined-contribution scheme similar to 401(k) plans in the U.S. could occur as early as fiscal 2000. One of most discussed aspects of the scheme is its likely effect on labor mobility. For example， a report issued by the LDP last December (“On the Introduc-tion of Defined Contribution Pensions”) asserts that one problem with defined benefit plans is their lack of portability at a time when labor mobility is accelerating due to changes in the industrial structure， employment structure and work attitudes.

However， doubt exists as to whether these common assumptions — that labor mobility is actu-ally growing， and that defined-contribution plans will enhance this trend — have been ade-quately examined (Figure 1). In this paper， we examine whether defined contribution plans will actually contribute to greater labor mobility.

Masaharu Usuki

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