The Illusory Effects of Saving Incentives on Saving

Eric M. Engen, William Gale and John Scholz

Journal of Economic Perspectives, 1996, vol. 10, issue 4, 113-138

Abstract: The authors evaluate research on how tax-based saving incentives (IRAs and 401(k)s) affect saving. Previous research overstates the impact of the incentives on saving by failing to account for several issues: households with saving incentives have stronger tastes for saving than others; saving incentives have interacted with debt, nonfinancial assets, financial markets, and pensions; and saving incentives represent pretax balances, whereas taxable accounts represent posttax balances. Accounting for these issues essentially eliminates the impact of saving incentives on saving. The authors conclude that little if any of the contributions to existing saving incentives have raised saving.

JEL-codes: E21 H31 J26 (search for similar items in EconPapers)
Date: 1996
Note: DOI: 10.1257/jep.10.4.113
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (174)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/jep.10.4.113 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:jecper:v:10:y:1996:i:4:p:113-38

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

Journal of Economic Perspectives is currently edited by Enrico Moretti

More articles in Journal of Economic Perspectives from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().