Do pension plans with participant investment choice teach households to hold more equity?
AbstractSome retirement plans allow the participant to choose how funds are invested. Having to direct investments may provide the participant with financial education. This paper finds that U.S. households covered by pension plans in which the employee chooses investments are significantly more apt to hold stock outside of their retirement plan than are households with pension plans offering no such choice. The effect of investment choice upon non-pension asset allocation is not explained by portfolio rebalancing or observable differences in income and saving preferences across households. This provides some evidence that the design of a pension plan may influence an employee s financial decisions outside of the pension plan, although unobserved heterogeneity in worker s preferences could also explain the result.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Cambridge University Press in its journal Journal of Pension Economics and Finance.
Volume (Year): 1 (2002)
Issue (Month): 03 (November)
Contact details of provider:
Postal: The Edinburgh Building, Shaftesbury Road, Cambridge CB2 2RU UK
Fax: +44 (0)1223 325150
Web page: http://journals.cambridge.org/jid_PEFProvider-Email:firstname.lastname@example.org
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- James Poterba & Joshua Rauh & Steven Venti & David Wise, 2006.
"Defined Contribution Plans, Defined Benefit Plans, and the Accumulation of Retirement Wealth,"
NBER Working Papers
12597, National Bureau of Economic Research, Inc.
- James Poterba & Joshua Rauh & Steven Venti & David Wise, 2007. "Defined contribution plans, defined benefit plans, and the accumulation of retirement wealth," NBER Chapters, in: Trans-Atlantic Public Economics Seminar (TAPES), Public Policy and Retirement, pages 2062-2086 National Bureau of Economic Research, Inc.
- Poterba, James & Rauh, Joshua & Venti, Steven & Wise, David, 2007. "Defined contribution plans, defined benefit plans, and the accumulation of retirement wealth," Journal of Public Economics, Elsevier, vol. 91(10), pages 2062-2086, November.
- Gene Amromin, 2008. "Precautionary Savings Motives and Tax Efficiency of Household Portfolios: An Empirical Analysis," NBER Chapters, in: Tax Policy and the Economy, Volume 22, pages 5-41 National Bureau of Economic Research, Inc.
- Jeffrey R. Brown & James M. Poterba, 2006.
"Household Ownership of Variable Annuities,"
in: Tax Policy and the Economy, Volume 20, pages 163-191
National Bureau of Economic Research, Inc.
- Seligman, Jason S. & Bose, Rana, 2012. "Learning by doing: Active employer sponsored retirement savings plan participation and household wealth accumulation," The Quarterly Review of Economics and Finance, Elsevier, vol. 52(2), pages 162-172.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Keith Waters).
If references are entirely missing, you can add them using this form.