U.S. municipal yields and unfunded state pension liabilities

Z. Lekniute, R.M.W.J. Beetsma, Eduard Ponds

Research output: Contribution to journalArticleScientificpeer-review

2 Citations (Scopus)


We present empirical evidence that municipal bond yields are increasing in both the explicit debt and the unfunded pension liabilities of U.S. state civil servants. However, the positive yield effects of both types of debt are found only for the period since the start of the global financial crisis. A potential explanation is that the crisis triggered awareness of budgetary sustainability. Further, the marginal yield effect of higher pension debt is significantly smaller than that of higher explicit debt.
Original languageEnglish
Pages (from-to)15-32
JournalJournal of Empirical Finance
Publication statusPublished - Sept 2019


  • civil servants pension funds
  • undefunding
  • explicit debt
  • implicit debt
  • municipal yields
  • unfunded pension liabilities
  • market values
  • actuarial values


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