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How Retirement Saving Programs Increase Saving

Author

Listed:
  • James M. Poterba
  • Steven F. Venti
  • David A. Wise

Abstract

This paper summarizes the authors work on the effect of IRA and 401(k) contributions on net personal saving. They consider many different nonparametric approaches to controlling for heterogeneity in individual saving behavior and conclude that the weight of the available evidence suggests that contributions to both IRAs and 401(k)s largely represent new saving. The authors devote particular attention to reconciling their results with the findings in other studies that reach different conclusions, sometimes using the same databases that the authors analyze. Methodological limitations that undermine the reliability of results in other studies explain many of these disparities.

Suggested Citation

  • James M. Poterba & Steven F. Venti & David A. Wise, 1996. "How Retirement Saving Programs Increase Saving," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 91-112, Fall.
  • Handle: RePEc:aea:jecper:v:10:y:1996:i:4:p:91-112
    Note: DOI: 10.1257/jep.10.4.91
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.10.4.91
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    References listed on IDEAS

    as
    1. Gale, William G & Scholz, John Karl, 1994. "IRAs and Household Saving," American Economic Review, American Economic Association, vol. 84(5), pages 1233-1260, December.
    2. 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.
    3. David A. Wise & Steven F. Venti, 1993. "The Wealth of Cohorts: Retirement Saving and the Changing Assets of Older Americans," NBER Working Papers 4600, National Bureau of Economic Research, Inc.
    4. Steven F. Venti & David A. Wise, 1986. "Tax-Deferred Accounts, Constrained Choice and Estimation of Individual Saving," Review of Economic Studies, Oxford University Press, vol. 53(4), pages 579-601.
    5. 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.
    6. 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.
    7. Shefrin, Hersh M & Thaler, Richard H, 1988. "The Behavioral Life-Cycle Hypothesis," Economic Inquiry, Western Economic Association International, vol. 26(4), pages 609-643, October.
    8. Jonathan S. Skinner, 1996. "Is Housing Wealth a Sideshow?," NBER Chapters, in: Advances in the Economics of Aging, pages 241-272, National Bureau of Economic Research, Inc.
    9. B. Douglas Bernheim & John B. Shoven, 1991. "National Saving and Economic Performance," NBER Books, National Bureau of Economic Research, Inc, number bern91-2, May.
    10. David A. Wise, 1987. "Individual Retirement Accounts and Saving," NBER Chapters, in: Taxes and Capital Formation, pages 3-16, National Bureau of Economic Research, Inc.
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    12. 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.
    13. Poterba, James M & Venti, Steven F & Wise, David A, 1994. "Targeted Retirement Saving and the Net Worth of Elderly Americans," American Economic Review, American Economic Association, vol. 84(2), pages 180-185, May.
    14. Venti, Steven F. & Wise, David A., 1995. "Individual response to a retirement saving program: results from U.S. panel data," Ricerche Economiche, Elsevier, vol. 49(3), pages 235-254, September.
    15. Steven F. Venti & David A. Wise, 1990. "Have IRAs Increased U. S. Saving?: Evidence from Consumer Expenditure Surveys," The Quarterly Journal of Economics, Oxford University Press, vol. 105(3), pages 661-698.
    16. Burman, Leonard E. & Cordes, Joseph J. & Ozanne, Larry, 1990. "IRAs and National Savings," National Tax Journal, National Tax Association;National Tax Journal, vol. 43(3), pages 259-283, September.
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    19. Steven F. Venti & David A. Wise, 1991. "The Saving Effect of Tax-deferred Retirement Accounts: Evidence from SIPP," NBER Chapters, in: National Saving and Economic Performance, pages 103-130, National Bureau of Economic Research, Inc.
    20. 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(1), pages 85-180.
    21. Gary V. Engelhardt, 1996. "Tax Subsidies and Household Saving: Evidence from Canada," The Quarterly Journal of Economics, Oxford University Press, vol. 111(4), pages 1237-1268.
    22. Orazio P. Attanasio & Thomas C. DeLeire, 1994. "IRAs and Household Saving Revisited: Some New Evidence," NBER Working Papers 4900, National Bureau of Economic Research, Inc.
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    More about this item

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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