Keywords
retirement savings, simplification, procrastination, behavioral economics
Abstract
The daunting complexity of important financial decisions can lead to procrastination. Weevaluate a low-cost intervention that substantially simplifies the retirement savings planparticipation decision. Individuals received an opportunity to enroll in a retirement savingsplan at a pre-selected contribution rate and asset allocation, allowing them to collapsea multidimensional problem into a binary choice between the status quo and the pre-selected alternative. The intervention increases plan enrollment rates by 10–20 percentagepoints. We find that a similar intervention can be used to increase contribution rates amongemployees who are already participating in a savings plan.
Original Publication Citation
“Simplification and Saving.” 2013. Journal of Economic Behavior and Organizations 95(November 2014): 130-145 (with John Beshears, James Choi and David Laibson). http://dx.doi.org/10.1016/j.jebo.2012.03.007
BYU ScholarsArchive Citation
Beshears, John; Choi, James J.; Laibson, David; and Madrian, Brigitte C., "Simplification and Saving" (2013). Faculty Publications. 9041.
https://scholarsarchive.byu.edu/facpub/9041
Document Type
Peer-Reviewed Article
Publication Date
2013
Publisher
Journal of Economic Behavior and Organizations
Language
English
College
Marriott School of Business
Department
Finance
Copyright Status
© 2012 Elsevier B.V. All rights reserved.
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