Working Paper: NBER ID: w17843
Authors: James J. Choi; Emily Haisley; Jennifer Kurkoski; Cade Massey
Abstract: In randomized field experiments, we embedded one- to two-sentence anchoring, goal-setting, or savings threshold cues in emails to employees about their 401(k) savings plan. We find that anchors increase or decrease 401(k) contribution rates by up to 1.9% of income. A high savings goal example raises contribution rates by up to 2.2% of income. Highlighting a higher savings threshold in the match incentive structure raises contributions by up to 1.5% of income relative to highlighting the lower threshold. Highlighting the maximum possible contribution rate raises contribution rates by up to 2.9% of income among low savers.
Keywords: 401(k); savings behavior; anchoring; goal setting; threshold effects
JEL Codes: D03; D14; D91; G02
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| low contribution rates (H29) | responsiveness to cues (D91) |
| high anchors (Y10) | 401(k) contribution rates (G51) |
| low anchors (Y60) | 401(k) contribution rates (G51) |
| high savings goal (D14) | 401(k) contribution rates (G51) |
| low savings goal (D14) | 401(k) contribution rates (G51) |
| high savings threshold (D14) | 401(k) contribution rates (G51) |