Liquidity in Retirement Savings Systems: An International Comparison

Authors

• John Beshears, Harvard University
• James J. Choi, Yale University
• Joshua Hurwitz, Harvard University
• David Laibson, Harvard University
• Brigitte C. Madrian, Brigham Young University - ProvoFollow

Keywords

retirement savings, liquidity tradeoffs, undersaving behavior

Abstract

What is the socially optimal level of liquidity in a retirement savings system? Liquid retirement savings are desirable because liquidity enables agents to flexibly respond to preretirement events that raise the marginal utility of consumption, like income shocks.¹ On the other hand, preretirement liquidity is undesirable when it leads to undersaving arising from, for example, planning mistakes or self- control problems.²

Original Publication Citation

“Liquidity in Retirement Savings Systems: An International Comparison.” 2017. In David A. Wise, editor, Insights in the Economics of Aging, University of Chicago Press, pp. 45-75 (with John Beshears, James J. Choi, Joshua Hurwitz and David Laibson. http://www.nber.org/chapters/c13633

BYU ScholarsArchive Citation

Beshears, John; Choi, James J.; Hurwitz, Joshua; Laibson, David; and Madrian, Brigitte C., "Liquidity in Retirement Savings Systems: An International Comparison" (2017). Faculty Publications. 9026.
https://scholarsarchive.byu.edu/facpub/9026

Document Type

Peer-Reviewed Article

Publication Date

2017

Publisher

Insights in the Economics of Aging

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/