We examine the effects of education on financial decision-making skills by identifying an interesting source of variation in pertinent training. During the 1990s, an increasing number of individuals were exposed to programs of financial education provided by their employers. If, as some have argued, low saving frequently results from a failure to appreciate economic vulnerabilities, then education of this form could prove to have a powerful effect on rates of behavior. The current paper undertakes an analysis of these programs using a previously unexploited survey of employers. We find that both participation in and contributions to voluntary savings plans are significantly higher when employers offer retirement seminars. The effect is typically much stronger for non-highly compensated employees than for highly compensated employees. The frequency of seminars emerges as a particularly important correlate of behavior. We are unable to detect any effects of written materials, such as newsletters and summary plan descriptions, regardless of frequency. We also present evidence on other determinants of plan activity.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
5655.
Length: Date of creation: Jul 1996 Date of revision: Handle: RePEc:nbr:nberwo:5655
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Find related papers by JEL classification: H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household I31 - Health, Education, and Welfare - - Welfare and Poverty - - - General Welfare
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.:
James M. Poterba & Steven F. Venti, 1994.
"401(k) Plans and Tax-Deferred Saving,"
NBER Chapters,
in: Studies in the Economics of Aging, pages 105-142
National Bureau of Economic Research, Inc.
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B. Douglas Bernheim & John Karl Scholz, 1993.
"Private Saving and Public Policy,"
NBER Chapters,
in: Tax Policy and the Economy, Volume 7, pages 73-110
National Bureau of Economic Research, Inc.
[Downloadable!]
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