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Catching up or crowding out? The crowd-out effects of catch-up retirement contributions on non-retirement saving

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  • Goodman, Lucas

Abstract

Using tax data, this paper exploits a discontinuous increase in retirement contribution limits based on exact date of birth. This paper finds clear evidence that constrained individuals increase their retirement saving when so eligible, but finds no evidence suggesting that non-retirement saving falls. In the baseline specifications, one can rule out crowd-out greater than approximately 0.38 to 0.57 at the 95% confidence level depending on the measure used. This suggests that the additional contributions induced by catch-up eligibility represent an increase in total private saving.

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  • Goodman, Lucas, 2020. "Catching up or crowding out? The crowd-out effects of catch-up retirement contributions on non-retirement saving," Journal of Public Economics, Elsevier, vol. 188(C).
    • Handle: RePEc:eee:pubeco:v:188:y:2020:i:c:s0047272720300852
    DOI: 10.1016/j.jpubeco.2020.104221
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    Cited by:

    1. Laurence O'Brien, 2024. "The effect of tax incentives on retirement saving," IFS Working Papers W24/45, Institute for Fiscal Studies.
    2. Camilla Skovbo Christensen & Bastian Emil Ellegaard, 2022. "Do Tax Subsidies for Retirement Saving Impact Total Private Saving? New Evidence on Middle-income Workers," CEBI working paper series 22-17, University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI).
    3. Laurence O'Brien, 2023. "The effect of tax incentives on private pension saving," IFS Working Papers W23/10, Institute for Fiscal Studies.

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    More about this item

    Keywords

    Retirement; Crowd-out; Regression discontinuity; Catch-up; 401(k);
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

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