Keywords
peer effects, retirement savings, social comparisons
Abstract
Using a field experiment in a 401(k) plan, we measure the effect of disseminating information about peer behavior on savings. Low-saving employees received simplified plan enrollment or contribution increase forms. A randomized subset of forms stated the fraction of age-matched coworkers participating in the plan or age-matched participants contributing at least 6% of pay to the plan. We document an oppositional reaction: the presence of peer information decreased the savings of nonparticipants who were ineligible for 401(k) automatic enrollment, and higher observed peer savings rates also decreased savings. Discouragement from upward social comparisons seems to drive this reaction.
Original Publication Citation
“The Effect of Providing Peer Information on Retirement Savings Decisions.” 2015. Journal of Finance 70(3): 1161-1201 (with John Beshears, James J. Choi, David Laibson and Katherine L. Milkman). http://dx.doi.org/10.1111/jofi.12258
BYU ScholarsArchive Citation
Beshears, John; Choi, James J.; Laibson, David; Madrian, Brigitte C.; and Milkman, Katherine L., "The Effect of Providing Peer Information on Retirement Savings Decisions" (2015). Faculty Publications. 9033.
https://scholarsarchive.byu.edu/facpub/9033
Document Type
Peer-Reviewed Article
Publication Date
2015
Publisher
Journal of Finance
Language
English
College
Marriott School of Business
Department
Finance
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