Simplification and Saving

John Leonard Beshears, James Choi, David Laibson and Brigitte Madrian

Scholarly Articles from Harvard University Department of Economics

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.

Date: 2012-11-20
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Citations: View citations in EconPapers (3)

Published in Journal of Economic Behavior and Organization

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Related works:
Journal Article: Simplification and saving (2013)
Working Paper: Simplification and Saving (2008)
Working Paper: Simplification and Saving (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:hrv:faseco:9925399

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