Searching for better prospects

"Recent declines in job tenure have coincided with a shift away from traditional defined benefit (DB) pensions, which reward long tenure. We develop a search model in which firms may offer tenure-based contracts like DB pensions to reduce the incidence of costly on-the-job search by workers. We focus on changing conditions that undermine such contracts. Lower search costs or an improved productivity distribution can, under fairly general conditions, reduce the value of deterring search and use of DB pensions. This explanation complements recent papers investigating the consequences of declines in search frictions and changes in the nature of new technologies"--Federal Reserve Bank of St. Louis web site.