How Much to Save? Decision Costs and Retirement Plan Participation
Deciding how much to save for retirement can be complicated. Drawing on a field experiment conducted with the Department of Defense, we study whether such complexity depresses participation in an employer-sponsored retirement saving plan. We find that simplifying one dimension of the enrollment decision, by highlighting a potential rate at which non-participants might contribute, increases participation in the plan. Similar communications that did not include a highlighted rate yield smaller effects. The results highlight how reducing complexity on the intensive margin of a decision (how much to contribute) can affect extensive margin behavior (whether to contribute at all) in a setting of policy interest.
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Copy CitationJacob Goldin, Tatiana Homonoff, Richard W. Patterson, and William L. Skimmyhorn, "How Much to Save? Decision Costs and Retirement Plan Participation," NBER Working Paper 27575 (2020), https://doi.org/10.3386/w27575.
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Published Versions
Jacob Goldin & Tatiana Homonoff & Richard Patterson & William Skimmyhorn, 2020. "How much to save? Decision costs and retirement plan participation," Journal of Public Economics, vol 191. citation courtesy of 
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