Liquidity in Retirement Savings Systems: An International Comparison

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

Scholarly Articles from Harvard University Department of Economics

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.

Date: 2015
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Published in American Economic Review

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Related works:
Chapter: Liquidity in Retirement Savings Systems: An International Comparison (2015)
Journal Article: 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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Persistent link: https://EconPapers.repec.org/RePEc:hrv:faseco:30403718

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