Do Low-Income Workers Benefit from 401(k) Plans?
AbstractEconomists frequently assume that employees "pay for" employer-provided fringe benefits, such as contributions to retirement plans, in the form of reduced wages. Because low-income employees receive little tax benefit from saving in qualified retirement plans, however, and may prefer immediate consumption to additional retirement accruals, they may not be willing to accept a one dollar reduction in their wage in return for an additional dollar contributed to their 401(k) plan, while high income workes may be willing to give up more than a dollar in wages to get the tax benefit.
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Bibliographic InfoPaper provided by Center for Retirement Research in its series Working Papers, Center for Retirement Research at Boston College with number wp2011-14.
Length: 45 pages
Date of creation: Sep 2011
Date of revision: Sep 2011
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Other versions of this item:
- NEP-AGE-2012-02-27 (Economics of Ageing)
- NEP-ALL-2012-02-27 (All new papers)
- NEP-LAB-2012-02-27 (Labour Economics)
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