Simplification and saving

John Beshears, James Choi, David Laibson and Brigitte Madrian

Journal of Economic Behavior & Organization, 2013, vol. 95, issue C, 130-145

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 10–20 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.

Keywords: Retirement savings; Simplification; Procrastination; Behavioral economics (search for similar items in EconPapers)
JEL-codes: D12 D14 D83 G11 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (62)

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Related works:
Working Paper: Simplification and Saving (2012)
Working Paper: Simplification and Saving (2008)
Working Paper: Simplification and Saving (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:95:y:2013:i:c:p:130-145

DOI: 10.1016/j.jebo.2012.03.007

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