Pensionomics: Measuring the Economic Impact of State and Local Pension Plans

Source: Ilana Boivie and Beth Almeida, National Institute on Retirement Security, February 2009

An economic impact analysis released today finds that the benefits provided by state and local government pension plans have a sizable impact that ripples through every state and industry across the nation. The new report, “Pensionomics: Measuring the Economic Impact of State and Local Pension Plans,” finds that expenditures made from state & local pension benefits for fiscal year 2005-2006:

  • Had a total economic impact of more than $358 billion.
  • Supported more than 2.5 million American jobs that paid more than $92 billion in total compensation to American workers.
  • Supported more than $57 billion in annual federal, state, local tax revenue.
  • Paid $151.7 billion in pension benefits to 7.3 million retirees and beneficiaries.
  • Had large multiplier effects. Each taxpayer dollar invested in state and local pensions supported $11.45 in total economic activity, while each dollar paid out in benefits supported $2.36 in economic activity.
  • Had the largest impact on the manufacturing, health care, finance, retail trade, and accommodation and food service sectors.

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