U.S. municipal yields and unfunded state pension liabilities

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

Research output: Contribution to journalArticleScientificpeer-review

Abstract

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
Volume53
DOIs
Publication statusPublished - Sep 2019

Fingerprint

Liability
Debt
Pensions
Bond yields
U.S. States
Empirical evidence
Civil servants
Municipal bonds
Sustainability
Global financial crisis

Keywords

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

Cite this

Lekniute, Z. ; Beetsma, R.M.W.J. ; Ponds, Eduard. / U.S. municipal yields and unfunded state pension liabilities. In: Journal of Empirical Finance. 2019 ; Vol. 53. pp. 15-32.
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U.S. municipal yields and unfunded state pension liabilities. / Lekniute, Z.; Beetsma, R.M.W.J.; Ponds, Eduard.

In: Journal of Empirical Finance, Vol. 53, 09.2019, p. 15-32.

Research output: Contribution to journalArticleScientificpeer-review

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