The Effect of Providing Peer Information on Retirement Savings Decisions

John Beshears, James Choi, David Laibson, Brigitte Madrian and Katherine Milkman

Journal of Finance, 2015, vol. 70, issue 3, 1161-1201

Abstract: type="main">

Using a field experiment in a 401(k) plan, we measure the effect of disseminating information about peer behavior on savings. Low-saving employees received simplified plan enrollment or contribution increase forms. A randomized subset of forms stated the fraction of age-matched coworkers participating in the plan or age-matched participants contributing at least 6% of pay to the plan. We document an oppositional reaction: the presence of peer information decreased the savings of nonparticipants who were ineligible for 401(k) automatic enrollment, and higher observed peer savings rates also decreased savings. Discouragement from upward social comparisons seems to drive this reaction.

Date: 2015
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Citations: View citations in EconPapers (169)

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Working Paper: The Effect of Providing Peer Information on Retirement Savings Decisions (2015)
Working Paper: The Effect of Providing Peer Information on Retirement Savings Decisions (2011)
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