Working Paper: NBER ID: w26128
Authors: M. Martin Boyer; Philippe Dastous; Pierre-Carl Michaud
Abstract: We conduct a stated-choice experiment to analyze the decision to contribute to front- or back-loaded tax-sheltered savings accounts. Our experimental design includes a randomized financial education treatment that provides information on these accounts. We assess whether respondents learn about the tax implications of these accounts and make contribution choices that increase after-tax income when exposed to the intervention. We find that our intervention improves both the understanding of the tax implications of the savings accounts (an increase of 6 to 15 percent) and contribution decisions. We find effects on after-tax lifetime-income for respondents by up to $1,900 per scenario presented.
Keywords: financial education; tax-sheltered accounts; retirement savings; decision making; Canada
JEL Codes: D14; G11; H31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Knowledge about tax implications of TFSA and RRSP accounts (H24) | Contribution decisions (D70) |
| Financial education intervention (G53) | Knowledge about tax implications of TFSA and RRSP accounts (H24) |
| Financial education intervention (G53) | Contribution decisions (D70) |