There’s still a bit of Texas in Adam Cobb, 33, as he folds his 6’5″ frame into a chair and describes the dissertation work that won him the first Robert Kahn Fellowship award. The new fellowship is meant to support empirical research that will shed light on a major social problem. In Cobb’s case, that problem is how the switch from company- to employee-financed retirement plans has impacted the employment relationship and possibly contributed to employee turnover.
Cobb got the kernel of his dissertation idea when his father picked him up at the Dallas/Fort Worth airport in 2006 after Cobb’s first year in the Ph.D. program in Management & Organizations at Michigan’s Ross School of Business. A casual conversation about how his farm-raised father became an engineer—in part to win better job security—left Cobb mulling over the promise of lifetime employment that was established following World War II, and how that promise disappeared.
“Several studies have been able to show that with a 401(k) system, people end up working longer, and there’s a lot more volatility and variance in their retirement wealth.”
In particular, Cobb became intrigued with how and why employers first began offering corporate-sponsored retirement benefits, and why they began to abandon them for employee-financed 401(k) plans.
Answering these and other questions is the goal of his dissertation, whose research falls into three parts. First, Cobb will dig into the United Auto Workers (UAW) archives at Wayne State University to explore the Treaty of Detroit, the historic 1950 agreement between the UAW and General Motors that, among other things, helped establish corporate-sponsored retirement plans as an expectation and norm. (“I could have done the dissertation without the Treaty of Detroit,” says Cobb, who admits to being a big history buff, “but I wanted to do it while I was here because the archive is right down the road.)
Cobb’s second study will examine what factors led firms to institute 401(k) plans in place of traditional defined benefit pensions, and his third study will look at the impact of retirement plan options on employee turnover.
Cobb and his advisors think the research will contribute to the coming retirement debate. “Several studies have been able to show that with a 401(k) system, people end up working longer, and there’s a lot more volatility and variance in their retirement wealth,” Cobb says. A case in point: the recent economic downturn, which caused the average 401(k) balance to drop 31 percent from 2007 to the end of 2009.
As the baby boomers retire, Cobb expects policymakers to push for government-run or more highly regulated retirement plans, in part to guard against another such collapse. “It’s a really poorly conceived idea to begin with to have employers responsible for our health care and retirement,” Cobb says. “I would hope my research would help in understanding these issues.”