The differences in the economic effects between the DB plan and the DC plan

This paper investigates the differences between the defined benefit plans (DB) and the defined contribution plans (DC) in the enterprise pension programs in Japan. Attention is paid not only to the effect of labor turnover but also to the difference in various categories of workers, which are classified by gender, education, timing of labor turnover, etc. Also, we take into consideration the effect of interest rates. One important conclusion of this paper is that the DC plan is superior to the DB plan, in contrast to the common belief. J. Japanese Int. Economies 18 (4) (2004) 551-564. Kyoto University, Japan. (C) 2004 Published by Elsevier Inc.