How do contribution limits affect contributions to tax-preferred savings accounts?
Contributions to tax-preferred savings accounts are typically constrained by a contribution limit. These limits influence contributions not just in periods in which they bind, but in other periods as well. I develop a simple life-cycle model in which consumers exhibit "use-it-or-lose-it" contribution behaviour. This connects current contributions to future contribution limits, which leads to the result that an increase in contribution limits can decrease contributions. Empirical evidence provides support for the model--larger future contribution room is associated with smaller contributions.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. 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.
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.:
- Michael R. Veall, 1999.
"Did Tax Flattening Affect RRSP Contributions?,"
Quantitative Studies in Economics and Population Research Reports
342, McMaster University.
- Michael R. Veall, 1999. "Did Tax Flattening Affect RRSP Contributions?," Department of Economics Working Papers 1999-04, McMaster University.
- Michael R. Veall, 1999. "Did Tax Flattening Affect RRSP Contributions?," Social and Economic Dimensions of an Aging Population Research Papers 3, McMaster University.
- David I. Laibson & Andrea Repetto & Jeremy Tobacman, 1998. "Self-Control and Saving for Retirement," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(1), pages 91-196.
- Gale, W.G. & scholz, J.K., 1992.
"IRAS and Household Saving,"
9244, Tilburg - Center for Economic Research.
- James M. Poterba & Steven F. Venti & David A. Wise, 1996.
"Personal Retirement Saving Programs and Asset Accumulation: Reconciling the Evidence,"
NBER Working Papers
5599, National Bureau of Economic Research, Inc.
- James M. Poterba & Steven F. Venti, 1998. "Personal Retirement Saving Programs and Asset Accumulation: Reconciling the Evidence," NBER Chapters, in: Frontiers in the Economics of Aging, pages 23-124 National Bureau of Economic Research, Inc.
- Androkovich, Robert A. & Daly, Michael J. & Naqib, Fadle M., 1992. "The impact of a hybrid personal tax system on capital accumulation and economic welfare," European Economic Review, Elsevier, vol. 36(4), pages 801-813, May.
- Akerlof, George A, 1991. "Procrastination and Obedience," American Economic Review, American Economic Association, vol. 81(2), pages 1-19, May.
- Venti, Steven F & Wise, David A, 1990.
"Have IRAs Increased U.S. Saving? Evidence from Consumer Expenditure Surveys,"
The Quarterly Journal of Economics,
MIT Press, vol. 105(3), pages 661-98, August.
- Steven F. Venti & David A. Wise, 1987. "Have IRAs Increased U.S. Saving?: Evidence from Consumer Expenditure Surveys," NBER Working Papers 2217, National Bureau of Economic Research, Inc.
- Bernheim, B. Douglas, 2002.
"Taxation and saving,"
Handbook of Public Economics,
in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 18, pages 1173-1249
- Michael J. Daly, 1981. "The Role of Registered Retirement Savings Plans in a Life-Cycle Model," Canadian Journal of Economics, Canadian Economics Association, vol. 14(3), pages 409-21, August.
- Triest, Robert K., 1998. "Econometric Issues in Estimating the Behavioral Response to Taxation: A Nontechnical Introduction," National Tax Journal, National Tax Association, vol. 51(n. 4), pages 761-72, December.
- Burman, Leonard E. & Cordes, Joseph J. & Ozanne, Larry, 1990. "IRAs and National Savings," National Tax Journal, National Tax Association, vol. 43(3), pages 259-83, September.
- Shoven, John B. & Sialm, Clemens, 2004.
"Asset location in tax-deferred and conventional savings accounts,"
Journal of Public Economics,
Elsevier, vol. 88(1-2), pages 23-38, January.
- John B. Shoven & Clemens Sialm, 1999. "Asset Location in Tax-Deferred and Conventional Savings Accounts," NBER Working Papers 7192, National Bureau of Economic Research, Inc.
- R. Glenn Hubbard & Jonathan S. Skinner, 1996.
"Assessing the Effectiveness of Saving Incentives,"
NBER Working Papers
5686, National Bureau of Economic Research, Inc.
- Jane G. Gravelle, 1991. "Do Individual Retirement Accounts Increase Savings?," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 133-148, Spring.
- Christopher Ragan, 1994. "Progressive Income Taxes and the Substitution Effect of RRSPs," Canadian Journal of Economics, Canadian Economics Association, vol. 27(1), pages 43-57, February.
- Alan J. Auerbach & Joel Slemrod, 1997. "The Economic Effects of the Tax Reform Act of 1986," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 589-632, June.
- Long, James E., 1990. "Marginal Tax Rates and IRA Contributions," National Tax Journal, National Tax Association, vol. 43(2), pages 143-53, June.
When requesting a correction, please mention this item's handle: RePEc:eee:pubeco:v:87:y:2003:i:2:p:253-281. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.