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Details Matter: The Impact of Presentation and Information on the Take-Up of Financial Incentives for Retirement Saving

  • Emmanuel Saez

We examine the effects of presentation and information on the take-up of financial subsidies for retirement saving in a large randomized experiment carried out with H&R Block. The subsidies raise take-up and contributions with larger effects when the subsidy is characterized as a matching contribution rather than an equivalent-value tax credit (or cash back), and when filers are informed before the tax season about the subsidy. The results imply that both pure incentives and the presentation of those incentives affect consumer choices. (JEL D14, H24, H31, J26)

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Article provided by American Economic Association in its journal American Economic Journal: Economic Policy.

Volume (Year): 1 (2009)
Issue (Month): 1 (February)
Pages: 204-28

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Handle: RePEc:aea:aejpol:v:1:y:2009:i:1:p:204-28
Note: DOI: 10.1257/pol.1.1.204
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  1. Eckel, Catherine C. & Grossman, Philip J., 2003. "Rebate versus matching: does how we subsidize charitable contributions matter?," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 681-701, March.
  2. Catherine C. Eckel & Philip J. Grossman, 2006. "Subsidizing Charitable Giving with Rebates or Matching: Further Laboratory Evidence," Southern Economic Journal, Southern Economic Association, vol. 72(4), pages 794–807, April.
  3. James J. Choi & David Laibson & Brigitte C. Madrian & Andrew Metrick, 2002. "Defined Contribution Pensions: Plan Rules, Participant Decisions, and the Path of Least Resistance," JCPR Working Papers 257, Northwestern University/University of Chicago Joint Center for Poverty Research.
  4. James J. Choi & David Laibson & Brigitte C. Madrian & Andrew Metrick, 2002. "Defined Contribution Pensions: Plan Rules, Participant Choices, and the Path of Least Resistance," NBER Chapters, in: Tax Policy and the Economy, Volume 16, pages 67-114 National Bureau of Economic Research, Inc.
  5. Douglas D. Davis & Edward L. Millner, 2005. "Rebates, Matches, and Consumer Behavior," Southern Economic Journal, Southern Economic Association, vol. 72(2), pages 410–421, October.
  6. Emmanuel Saez & Esther Duflo & Jeffrey Liebman & Peter Orszag & William Gale, 2005. "Saving incentives for low- and middle-income families: Evidence from a field experiment with h&r block," Framed Field Experiments 00234, The Field Experiments Website.
  7. Catherine Eckel, 2005. "Subsidizing Charitable Contributions: A Field Test Comparing Matching and Rebate Subsidies," Working Papers 2098, The Field Experiments Website.
  8. Esther Duflo & Emmanuel Saez, 2000. "Participation and Investment Decisions in a Retirement Plan: The Influence of Colleagues' Choices," NBER Working Papers 7735, National Bureau of Economic Research, Inc.
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  11. Douglas Davis & Edward Millner & Robert Reilly, 2005. "Subsidy Schemes and Charitable Contributions: A Closer Look," Experimental Economics, Springer, vol. 8(2), pages 85-106, June.
  12. Catherine C. Eckel & Philip J. Grossman, 2006. "Do Donors Care about Subsidy Type? An Experimental Study," Monash Economics Working Papers archive-10, Monash University, Department of Economics.
  13. Gary V. Engelhardt & Anil Kumar, 2006. "Employer Matching and 401(k) Saving: Evidence from the Health and Retirement Study," NBER Working Papers 12447, National Bureau of Economic Research, Inc.
  14. Marianne Bertrand & Dean Karlin & Sendhil Mullainathan & Eldar Shafir & Jonathan Zinman, 2005. "What's Psychology Worth? A Field Experiment in the Consumer Credit Market," NBER Working Papers 11892, National Bureau of Economic Research, Inc.
  15. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-91, March.
  16. Douglas D. Davis, 2006. "Rebate Subsidies, Matching Subsidies and Isolation Effects," Working Papers 0604, VCU School of Business, Department of Economics.
  17. Gur Huberman & Sheena Iyengar & Wei Jiang, 2007. "Defined Contribution Pension Plans: Determinants of Participation and Contributions Rates," Journal of Financial Services Research, Springer, vol. 31(1), pages 1-32, February.
  18. Catherine C. Eckel & Philip J. Grossman, 2006. "Subsidizing Charitable Contributions in the Field: Evidence from a Non-Secular Charity," Monash Economics Working Papers archive-44, Monash University, Department of Economics.
  19. James J. Choi & David Laibson & Brigitte C. Madrian, 2004. "Plan Design and 401(k) Savings Outcomes," NBER Working Papers 10486, National Bureau of Economic Research, Inc.
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