Determinants and Effects of Employer Matching Contributions in 401(k) Plans

William Even () and David Macpherson

Labor and Demography from University Library of Munich, Germany

Abstract: This paper uses data from the April 1993 Pension Supplements to the Current Population Survey to investigate the impact of employer matching and employee tenure on participation levels in 401(k) plans. While earlier studies examine similar issues, this study makes several advances. First, consistent with the theory that employers may use matching contributions to satisfy nondiscrimination rules, the study shows that correcting for the endogeneity of employer matching substantially increases the estimated effect of matching on participation levels. Second, the study provides evidence that the large positive association between employee tenure and 401(k) participation is because 'stayers' tend to be 'savers'.

JEL-codes: J (search for similar items in EconPapers)
Pages: 33 pages
Date: 2004-05-03
New Economics Papers: this item is included in nep-lab
Note: Type of Document - pdf; pages: 33
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpla:0405001

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