As the debate over public employee pensions continues, the Center for Retirement Research at Boston College has produced a new brief titled, “Comparing Wealth in Retirement: State-Local Versus Private Sector Workers.” The paper takes a unique approach to quantifying the generosity of public employee pensions and compensation. The comparison comes from an analysis of wealth in retirement, or how much money an individual once they reach the age of 65.

The research, based upon a long-term study, titled Health and Retirement Study, performed by the University of Michigan. That study has followed more than 12,650 people in 7.600 households since 1992, asking them a series of questions about financial standing, spending habits, retirement, pensions, and employers. Over the years, the sample size has grown even larger.

When that data was used by the researchers at Boston College, it produced an answer: If someone spends more than half of their career in public service, they are likely to be at least 11% wealthier in retirement.

“The results show that spending more than 50 percent of one’s career as a state-local worker is associated with 11 percent to 18 percent more wealth at age 65,” says the CRR’s report. “Those who spend only a brief time in state-local employment appear to end up with less wealth than those who never work as a public employee when compared to the private sector.”

“This effort involved looking at the total wealth – defined broadly to include retiree health insurance as well as Social Security and defined benefit pension wealth – of state-local and private sector couples when the husband was 65. After controlling for factors likely to affect wealth accumulation, the results showed that the one-third of those with state-local employment who spent more than one-half their career in public employment had household wealth that was 11 percent to 18 percent larger at 65. Subsequent analysis suggests that this greater wealth may well reflect being forced to save through participation in a defined benefit pension. The other two-thirds of those with state-local employment who spent less than half their career as a public worker ended up with less wealth than private sector employees. In short, as a group, couples with state-local workers, all else equal, do not end up richer than couples with private sector careers. “

You can read the rest of the Brief from Boston College’s Center for Retirement Research here.