The Effect of Automatic Enrolment on Debt

Authors

• William Skinnyhorn, William & Mary
• Brigitte C. Madrian, Brigham Young University - ProvoFollow
• James Choi, Yale University
• David Laibson, Harvard University
• John Beshears, Harvard University

Keywords

automatic enrolment, pension savings, household debt

Abstract

Automatic enrolment in defined contribution pension plans might be the most common policy application of behavioural economics. But does automatic enrolment increase pension savings at the expense of increased household debt? This column examines a natural experiment in which the US Army began automatically enrolling its civilian employees in its retirement savings plan. It finds strong evidence against the hypothesis that automatic enrolment increases financial distress and debt excluding auto loans and first mortgages.

Original Publication Citation

VOX column “The Impact of Automatic Enrolment on Debt,” August 17, 2019 https://voxeu.org/article/effect-automatic-enrolment-debt

BYU ScholarsArchive Citation

Skinnyhorn, William; Madrian, Brigitte C.; Choi, James; Laibson, David; and Beshears, John, "The Effect of Automatic Enrolment on Debt" (2022). Faculty Publications. 8937.
https://scholarsarchive.byu.edu/facpub/8937

Document Type

Peer-Reviewed Article

Publication Date

2022

Publisher

VOX

Language

English

College

Marriott School of Business

Department

Finance

University Standing at Time of Publication

Full Professor

Copyright Use Information

https://lib.byu.edu/about/copyright/