Employer Matching and 401(k) Saving: Evidence from the Health and Retirement Study

Gary V. Engelhardt () and Anil Kumar
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Gary V. Engelhardt: Syracuse University

Working Papers, Center for Retirement Research at Boston College from Center for Retirement Research

Abstract: Employer matching of employee 401(k) contributions can provide a powerful incentive to save for retirement. We examine the effect of matching on 401(k) saving accounting for non-linearities in the intertemporal budget set. We use detailed administrative contribution, earnings, and pension plan data from the Health and Retirement Study and estimate that the elasticity of contributions with respect to matching is 0.15-0.27 overall, with sixty percent of this effect on the participation margin and the remaining forty percent on the intensive margin. The estimated after-tax cross-price elasticity of 401(k) contributions with respect to IRA saving is -0.60, which suggests 401(k)s and IRAs are substitutes in tax-deferred saving. We find no evidence of endogenous worker sorting based on the discount rate to plans that offer matching.

Keywords: 401(k); saving; employer matching (search for similar items in EconPapers)
JEL-codes: D91 J26 J33 (search for similar items in EconPapers)
Pages: 57 pages
Date: 2004-05
New Economics Papers: this item is included in nep-fmk
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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http://crr.bc.edu/working-papers/employer-matching ... nd-retirement-study/

Related works:
Chapter: Employer Matching and 401(k) Saving: Evidence from the Health and Retirement Study (2007)
Journal Article: Employer matching and 401(k) saving: Evidence from the health and retirement study (2007)
Working Paper: Employer Matching and 401(k) Saving: Evidence from the Health and Retirement Study (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:crr:crrwps:2004-18

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