Working Paper: NBER ID: w7735
Authors: Esther Duflo; Emmanuel Saez
Abstract: This paper investigates whether peer effects play an important role in retirement savings decisions. We use individual data from the staff of a university to study whether individual decisions to enroll in a Tax Deferred Account plan sponsored by the university (and the choice of the mutual fund vendor for people who choose to enroll) are affected by the decisions of other employees in the same department. To overcome the identification problems, we separate the departments into sub-groups (along gender, status, age, and tenure lines) and we instrument the average participation of each peer group by the salary or tenure structure in this group. Our results suggest that peer effects are important. We find significant own-group peer effect on participation and on vendor's choice, but no cross-group peer effects.
Keywords: No keywords provided
JEL Codes: D83; I22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Peers' enrollment decisions (C92) | Individual participation in tax-deferred accounts (D14) |
| Peers' enrollment decisions (C92) | Choice of mutual fund vendors (G23) |
| Average participation of peer group (C92) | Individual participation in tax-deferred accounts (D14) |
| Average participation of peer group (C92) | Choice of mutual fund vendors (G23) |