TY  - JOUR
AU  - Beshears,John
AU  - Choi,James J.
AU  - Laibson,David
AU  - Madrian,Brigitte C.
TI  - The Availability and Utilization of 401(k) Loans
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 17118
PY  - 2011
Y2  - June 2011
UR  - http://www.nber.org/papers/w17118
L1  - http://www.nber.org/papers/w17118.pdf
N1  - Author contact info:
John Beshears
Stanford Graduate School of Business
655 Knight Way
Stanford, CA 94305-7298
Tel: 650/723-6792
E-Mail: beshears@stanford.edu

James J. Choi
Yale School of Management
135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
E-Mail: james.choi@yale.edu

David Laibson
Department of Economics
Littauer M-12
Harvard University
Cambridge, MA 02138
Tel: 617/496-3402
Fax: 617/495-8570
E-Mail: dlaibson@gmail.com

Brigitte C. Madrian
John F. Kennedy School of Government
Harvard University
79 JFK Street
Cambridge, MA 02138
Tel: 617-495-8917
Fax: 617-496-5960
E-Mail: Brigitte_Madrian@Harvard.edu
M2  - featured in NBER digest on 2011-10-01
M3  - presented at "Aging Conference", May 6-7, 2011
AB  - We document the loan provisions in 401(k) savings plans and how participants use 401(k) loans. Although only about 22% of savings plan participants who are allowed to borrow from their 401(k) have such a loan at any given point in time, almost half had used a 401(k) loan over a longer, seven-year horizon. The probability of having a loan follows a hump-shaped pattern with respect to age, job tenure, account balance, and salary, but conditional on having a loan, loan size as a fraction of 401(k) balances declines with respect to these variables. Participants are less likely to use loans in plans that charge a higher interest rate, and loans are smaller when plans allow fewer simultaneously outstanding loans, impose a shorter maximum possible loan duration, or charge a lower interest rate.
ER  -