How Do State “Auto-IRA” Policies Affect Household Balance Sheets?

We examine how state policies requiring firms to facilitate workplace retirement saving affect household balance sheets. Using data from the Survey of Income and Program Participation (SIPP), we compare private-sector workers likely exposed to Oregon’s Automatic-Enrollment Individual Retirement Account (Auto-IRA) policy with similar workers in not-yet-adopting states. We find that the Auto-IRA policy is associated with increases in IRA and employer-sponsored retirement plan ownership and assets. We also find increases in checking or savings account ownership and balances, as well as higher credit card debt. The results suggest that Auto-IRA policies spill over to household liquidity management and borrowing.