The Effect of Providing Peer Information on Retirement Savings Decisions

John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian, Katherine L. Milkman

NBER Working Paper No. 17345
Issued in August 2011
NBER Program(s):   AG   LS

We measure how receiving information about coworkers’ savings behavior affects recipients’ savings choices. Low-saving employees were sent a simplified 401(k) plan enrollment or contribution increase form. A randomized subset of forms included information on the (high) fraction of coworkers either participating in or contributing at least 6% of pay to the plan. We find no significant evidence that this peer information altered the savings decisions of recipients who had previously opted out of an automatic 401(k) enrollment program. Peer information decreased the savings of (unionized) recipients who were not eligible for automatic enrollment. Our results highlight the limitations of peer information interventions.

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This paper was revised on February 9, 2012

Acknowledgments

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