IRAs and Household Saving

William Gale and John Scholz

American Economic Review, 1994, vol. 84, issue 5, 1233-60

Abstract: This paper examines the effects of Individual Retirement Accounts (IRAs) on private and national saving. The authors construct a formal model of dynamic utility maximization that generates closed-form equations for IRA and other saving. Their empirical estimates indicate that raising the annual IRA contribution limit between 1983 and 1986 would have resulted in little, if any, increase in national saving. Results from sensitivity analysis imply substantially smaller effects on national saving than most previous researchers have estimated. The authors' results are consistent with new evidence they present indicating considerable potential among IRA holders to shift taxable forms of saving into IRAs. Copyright 1994 by American Economic Association.

Date: 1994
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Related works:
Working Paper: IRAS and Household Saving (1992)
Working Paper: IRAs and household saving (1992)
Working Paper: IRAS AND HOUSEHOLD SAVINGS (1990)
Working Paper: IRA'S AND HOUSEHOLDS SAVING (1990)
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