This paper undertakes a review of the existing academic work on tax incentives and personal saving. Its central conclusions are as follows. First, the traditional life cycle hypothesis has had an excessive influence on the design and conceptualization of empirical investigations concerning taxation and saving. Second, there is little reason to believe that households increase their saving significantly in response to a generic increase in the after-tax rate of return. Third, the literature on the relation between Individual Retirement Accounts (IRAs) and personal saving is inconclusive. Fourth, one can be moderately confident that, all else equal, eligibility for a 401(k) plan significantly stimulates personal saving. Fifth, tax incentives probably have important effects on personal saving through "third party" or institutional channels. Sixth, there is, overall, considerable uncertainty about the effects of policies designed to promote saving, particularly in cases where these policies have the potential to induce significant institutional change (such as a consumption tax).
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
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Stanford University, Department of Economics in its series Working Papers with number
96009.
For technical questions regarding this item, or to correct its listing, contact: (Thomas Krichel).
Related research
Keywords:
Other versions of this item:
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.)