The Response of Wages to Mandated Benefits: Evidence from Automatic Pension Enrollment

Abstract

We study who bears the cost of mandated workplace pensions using the UK rollout. Employer contributions raise total compensation but reduce take-home pay, implying 50% pass-through to employees. Effects vary by firm size: in the largest firms, pay declines rule out pass-through above 47%, providing the first causal evidence that employers shift mandated costs onto workers.