Simplification and Saving
John Beshears,
James Choi,
David Laibson and
Brigitte Madrian
No 12659, NBER Working Papers from National Bureau of Economic Research, Inc
Abstract:
The daunting complexity of important financial decisions can lead to procrastination. We evaluate a low-cost intervention that substantially simplifies the retirement savings plan participation decision. Individuals received an opportunity to enroll in a retirement savings plan at a pre-selected contribution rate and asset allocation, allowing them to collapse a multidimensional problem into a binary choice between the status quo and the pre-selected alternative. The intervention increases plan enrollment rates by 10 to 20 percentage points. We find that a similar intervention can be used to increase contribution rates among employees who are already participating in a savings plan.
JEL-codes: D12 D14 D83 G11 (search for similar items in EconPapers)
Date: 2006-10
New Economics Papers: this item is included in nep-dcm
Note: AG LS PE
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Citations: View citations in EconPapers (18)
Published as Beshears, John & Choi, James J. & Laibson, David & Madrian, Brigitte C., 2013. "Simplification and saving," Journal of Economic Behavior & Organization, Elsevier, vol. 95(C), pages 130-145.
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