Working Paper: NBER ID: w17345
Authors: John Beshears; James J. Choi; David Laibson; Brigitte C. Madrian; Katherine L. Milkman
Abstract: We conducted a field experiment in a 401(k) plan to measure the effect of disseminating information about peer behavior on savings. Low-saving employees received simplified plan enrollment or contribution increase forms. A randomized subset of forms stated the fraction of age-matched coworkers participating in the plan or age-matched participants contributing at least 6% of pay to the plan. We document an oppositional reaction: the presence of peer information decreased the savings of non-participants who were ineligible for 401(k) automatic enrollment, and higher observed peer savings rates also decreased savings. Discouragement from upward social comparisons seems to drive this reaction.
Keywords: peer information; retirement savings; 401(k) plans; field experiment
JEL Codes: D03; D14; D83; D91
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| peer information (C92) | enrollment likelihood (I24) |
| peer information (C92) | contribution rate change (J39) |
| fraction of coworkers enrolled (J54) | enrollment likelihood (I24) |
| peer information (C92) | contribution rates of low-savers (D14) |