This paper evaluates research examining the effects of tax-based saving incentives on private and national saving. Several" factors make this an unusually difficult problem. First, households that participate in, or are eligible for, saving incentive plans have systematically stronger tastes for saving than other households. Second, the data indicate that households with saving incentives have taken on more debt than other households. Third, significant changes in the 1980s in financial markets, pensions, social security, and nonfinancial assets interacted with the expansion of saving incentives. Fourth, saving incentive accounts represent pre-tax balances, whereas conventional taxable accounts represent post-tax balances. Fifth, the fact that employer contributions to saving incentive plans are a part of total employee compensation is typically ignored. A major theme of this paper is that analyses that ignore these issues overstate the impact of saving incentives on saving. We show that accounting for these factors largely or completely eliminates the estimated positive impact of saving incentives on saving found in the literature. Thus, we conclude that little if any of the overall contributions to existing saving incentives have raised private or national saving. *Portions of this article were published in the JEP, 1996, under title of "The Illusory Effects of Saving Incentives 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Publisher Info
Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
5759.
Length: Date of creation: Sep 1996 Date of revision: Handle: RePEc:nbr:nberwo:5759
Note: PE Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A. Phone: 617-868-3900 Email: Web page: http://www.nber.org More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: ().
Related research
Keywords:
Other versions of this item:
Find related papers by JEL classification: H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
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.:
Gale, W.G. & scholz, J.K., 1992.
"IRAS and Household Saving,"
Papers
9244, Tilburg - Center for Economic Research.
Other versions:
Daniel Feenberg & Jonathan Skinner, 1989.
"Sources of IRA Saving,"
NBER Working Papers
2845, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions:
Daniel Feenberg & Jonathan Skinner, 1989.
"Sources of IRA Saving,"
NBER Chapters,
in: Tax Policy and the Economy, Volume 3, pages 25-46
National Bureau of Economic Research, Inc.
[Downloadable!]
Steven F. Venti & David A. Wise, 1987.
"IRAs and Saving,"
NBER Chapters,
in: The Effects of Taxation on Capital Accumulation, pages 7-52
National Bureau of Economic Research, Inc.
[Downloadable!]
Other versions:
Steven F. Venti & David A. Wise, 1986.
"IRAs and Saving,"
NBER Working Papers
1879, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
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!]
Other versions:
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.)