Retirement Contribution Rate Nudges and Plan Participation: Evidence from a Field Experiment

Simple interventions like changing the default or sending a short message can induce individuals to save more for retirement. However, messages that emphasize high savings rates may increase the amount that savings plan participants save while reducing the total number of plan participants. We study...

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Bibliographic Details
Published in:The American economic review 2017-05, Vol.107 (5), p.456-461
Main Authors: Goldin, Jacob, Homonoff, Tatiana, Tucker-Ray, Will
Format: Article
Language:English
Subjects:
Armed forces
Base pay
Behavioral sciences
Contribution rates
Control groups
Deferred compensation
EVALUATING BEHAVIORAL POLICY APPLICATIONS USING ADMINISTRATIVE DATA
Field experiments
Fractions
Military service
Motivation
Retirement
Retirement plans
Retirement savings
Savings plan
Savings plans
Social conditions & trends
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Summary:Simple interventions like changing the default or sending a short message can induce individuals to save more for retirement. However, messages that emphasize high savings rates may increase the amount that savings plan participants save while reducing the total number of plan participants. We study this possibility in the context of a field experiment designed to increase retirement savings by US military service-members. We find that service-members who received a message emphasizing a low contribution rate were more likely to participate in a savings plan than were service-members whose message emphasized a high contribution rate, or no rate at all.
ISSN:0002-8282
1944-7981
DOI:10.1257/aer.p20171059