Liquidity in Retirement Savings Systems: An International Comparison

John Beshears, James Choi, Joshua Hurwitz, David Laibson and Brigitte Madrian

American Economic Review, 2015, vol. 105, issue 5, 420-25

Abstract: We compare the liquidity that six developed countries have built into their employer-based defined contribution (DC) retirement schemes. In Germany, Singapore, and the UK, withdrawals are essentially banned no matter what kind of transitory income shock the household realizes. By contrast, in Canada and Australia, liquidity is state-contingent. For a middle-income household, DC accounts are completely illiquid unless annual income falls substantially, in which case DC assets become highly liquid. The US stands alone in the universally high liquidity of its DC system: whether or not income falls, the penalties for early withdrawal are low or non-existent.

JEL-codes: D14 J26 J32 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/aer.p20151004
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Citations: View citations in EconPapers (26)

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Related works:
Chapter: Liquidity in Retirement Savings Systems: An International Comparison (2015)
Working Paper: Liquidity in Retirement Savings Systems: An International Comparison (2015)
Working Paper: Liquidity in Retirement Savings Systems: An International Comparison (2015)
Working Paper: Liquidity in Retirement Savings Systems: An International Comparison (2015)
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