A new economic impact study finds that pension benefit expenditures provide important economic support to the American economy, including more than US$943 billion in total economic output.
The National Institute on Retirement Security study, Pensionomics 2014: Measuring the Economic Impact of Defined Benefit Pension Expenditures, measures the economic ripple effect of retiree spending of pension benefit income, which typically is a stable source of income that lasts through retirement.
The report finds that expenditures made from public, private and federal government pension benefits in 2012 did the following:
- supported 6.2 million American jobs that paid nearly US$307 billion in labour income to American workers;
- supported more than US$135 billion in federal, state and local tax revenue;
- had large multiplier effects—for every dollar paid out in pension benefits, US$1.98 in total economic output was supported; for every taxpayer dollar contributed to state and local pensions, US$8.06 in total output was supported;
- had the largest employment impact on the food services, real estate, healthcare and retail trade sectors; and
- paid nearly US$477 billion in pension benefits to 24 million retired Americans and beneficiaries.
The report also analyzed the economic impact of state and local pensions in all 50 states and the District of Columbia.
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