This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

401(k)s and household saving: new evidence from the Survey of Consumer Finances

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Karen M. Pence
Abstract

Although households have invested billions in 401(k) accounts, these balances may not be new saving if workers invest money that they would have saved in the program's absence. In this paper, I assess the effect of the 401(k) program on saving by comparing changes in the wealth of 401(k) eligible and ineligible households over the 1989-1998 period using data from the Survey of Consumer Finances (SCF). This comparison may yield misleading estimates of the effect of 401(k)s on saving if eligible households have a higher taste for saving than ineligible households or if they begin the 1989-1998 period with greater amounts of wealth. I adjust for these potential biases by constructing subjective measures of saving taste from questions on the SCF and by transforming the wealth measure with the inverse hyperbolic sine. Incorporating these adjustments suggests that 401(k)s have little to no effect on saving.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. 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.

File URL: http://www.federalreserve.gov/pubs/feds/2002/200206/200206abs.html
File Format: text/html
File Function:
Download Restriction: no
File URL: http://www.federalreserve.gov/pubs/feds/2002/200206/200206pap.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Board of Governors of the Federal Reserve System (U.S.) in its series Finance and Economics Discussion Series with number 2002-6.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: 2002
Date of revision:
Handle: RePEc:fip:fedgfe:2002-6

Contact details of provider:
Postal: 20th Street and Constitution Avenue, NW, Washington, DC 20551
Web page: http://www.federalreserve.gov/
More information through EDIRC

Order Information:
Web: http://www.federalreserve.gov/pubs/feds/fedsorder.html

For technical questions regarding this item, or to correct its listing, contact: (Diane Rosenberger).

Related research
Keywords: Pensions ; Retirement ; Saving and investment;

Other versions of this item:

This paper has been announced in the following NEP Reports: References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Mitchell, Olivia S, 1988. "Worker Knowledge of Pension Provisions," Journal of Labor Economics, University of Chicago Press, vol. 6(1), pages 21-39, January. [Downloadable!] (restricted)
    Other versions:
  2. Leslie E. Papke & Mitchell Petersen & James M. Poterba, 1996. "Did 401(k) Plans Replace Other Employer Provided Pensions?," NBER Working Papers 4501, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. James M. Poterba & Steven F. Venti & David A. Wise, 1997. "Personal Retirement Saving Programs and Asset Accumulation: Reconciling the Evidence," NBER Working Papers 5599, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Martha Starr-McCluer & Annika Sunden, 1999. "Workers' knowledge of their pension coverage: a reevaluation," Finance and Economics Discussion Series 1999-05, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  5. Hubbard, R Glenn & Skinner, Jonathan S, 1996. "Assessing the Effectiveness of Saving Incentives," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 73-90, Fall. [Downloadable!] (restricted)
    Other versions:
  6. Poterba, James M & Venti, Steven F & Wise, David A, 1996. "How Retirement Saving Programs Increase Saving," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 91-112, Fall. [Downloadable!] (restricted)
  7. Arthur B. Kennickell & Annika E. Sunden, 1997. "Pensions, social security, and the distribution of wealth," Finance and Economics Discussion Series 1997-55, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  8. Richard T. Curtin & Thomas Juster & James N. Morgan, 1989. "Survey Estimates of Wealth: An Assessment of Quality," NBER Chapters, in: The Measurement of Saving, Investment, and Wealth, pages 473-552 National Bureau of Economic Research, Inc. [Downloadable!]
  9. Poterba, James M. & Venti, Steven F. & Wise, David A., 1995. "Do 401(k) contributions crowd out other personal saving?," Journal of Public Economics, Elsevier, vol. 58(1), pages 1-32, September. [Downloadable!] (restricted)
    Other versions:
  10. Eric M. Engen & William G. Gale, 2000. "The Effects of 401(k) Plans on Household Wealth: Differences Across Earnings Groups," NBER Working Papers 8032, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  11. Engen, Eric M & Gale, William G & Scholz, John Karl, 1996. "The Illusory Effects of Saving Incentives on Saving," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 113-38, Fall. [Downloadable!] (restricted)
  12. Eric M. Engen & William G. Gale & John Karl Scholz, 1994. "Do Saving Incentives Work?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(1994-1), pages 85-180. [Downloadable!]
  13. Buchinsky, Moshe, 1995. "Estimating the asymptotic covariance matrix for quantile regression models a Monte Carlo study," Journal of Econometrics, Elsevier, vol. 68(2), pages 303-338, August. [Downloadable!] (restricted)
  14. Leslie E. Papke, 1996. "Are 401(k) Plans Replacing Other Employer-Provided Pensions? Evidence from Panel Data," NBER Working Papers 5736, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Gene Amromin, 2005. "Precautionary savings motives and tax efficiency of household portfolios: an empirical analysis," Finance and Economics Discussion Series 2005-01, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  2. Geng Li & Paul A. Smith, 2008. "Borrowing from yourself: 401(k) loans and household balance sheets," Finance and Economics Discussion Series 2008-42, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  3. repec:bep:eapcon:v:5:y:2006:i:1:p:1430-1430 is not listed on IDEAS
Statistics
Access and download statistics

Did you know? You can create a compilation of all publications of a group of people, say alumni of a program, your students or memers of an association.

This page was last updated on 2009-11-18.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.