This report summarizes a review of the literature on employee benefits. It indicates what is known and not known about the effects of providing benefits on both employees and employers. Following an introductory discussion on the problems and prospect of employee benefits, the report is organized in 11 sections. The first four sections indicate why employees want benefits and the cost of benefits to employees, why employers offer benefits, and the role benefit packages play in matching firms and workers. The following six sections review the public policy issues pertaining to specific areas in which benefits are offered, including pensions, health insurance, and dependent care. Also included are discussions of flexible benefit plans and individual retirement accounts. Throughout the report, as well as in the concluding section, questions are raised that need to be addressed in the development of a comprehensive benefits policy. A 59-item bibliography is included in the report. (KC)