IDEAS home Printed from https://ideas.repec.org/a/ntj/journl/v55y2002i3p597-616.html
   My bibliography  Save this article

Nature or Nurture: Why Do 401(K) Participants Save Differently Than Other Workers?

Author

Listed:
  • Pence, Karen M.

Abstract

Participants in 401(k) plans are more likely than other workers to list "retirement" as their main reason for saving, to hold individual retirement accounts, and to invest in the stock market. There are two possible reasons for these differences: (1) workers who like to save choose to participate in the program; or (2) 401(k) participation educates workers about investing. I find some support for both explanations using data from the 1983-1989 Survey of Consumer Finances. These results have important implications for proposals to partially privatize the Social Security system. First, 401(k) participants are different from the work force as a whole: they have more income and education, and most importantly, a greater interest in saving for retirement. Extrapolating from their saving behavior to that of the workforce at large could be misleading. Second, the education provided by 401(k) participation appears to have only a modest effect on saving behavior, suggesting that this education alone may not fully address concerns about the savvy of American savers.

Suggested Citation

  • Pence, Karen M., 2002. "Nature or Nurture: Why Do 401(K) Participants Save Differently Than Other Workers?," National Tax Journal, National Tax Association;National Tax Journal, vol. 55(3), pages 597-616, September.
    • Handle: RePEc:ntj:journl:v:55:y:2002:i:3:p:597-616
    DOI: 10.17310/ntj.2002.3.11
    as

    Download full text from publisher

    File URL: https://doi.org/10.17310/ntj.2002.3.11
    Download Restriction: Access is restricted to subscribers and members of the National Tax Association.
    File URL: https://doi.org/10.17310/ntj.2002.3.11
    Download Restriction: Access is restricted to subscribers and members of the National Tax Association.
    File URL: https://libkey.io/10.17310/ntj.2002.3.11?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tansel, Aysit & Öztürk, Ceyhan & Erdil, Erkan, 2021. "The Impact of Body Mass Index on Growth, Schooling, Productivity, and Savings: A Cross-Country Study," IZA Discussion Papers 14727, Institute of Labor Economics (IZA).
    2. Mitchell, Olivia S. & Utkus, Stephen P. & Yang, Tongxuan (Stella), 2007. "Turning Workers Into Savers? Incentives, Liquidity, and Choice in 401(K) Plan Design," National Tax Journal, National Tax Association;National Tax Journal, vol. 60(3), pages 469-489, September.
    3. Gene Amromin, 2008. "Precautionary Savings Motives and Tax Efficiency of Household Portfolios: An Empirical Analysis," NBER Chapters, in: Tax Policy and the Economy, Volume 22, pages 5-41, National Bureau of Economic Research, Inc.
    4. Karen E Dynan & Donald L Kohn, 2007. "The Rise in US Household Indebtedness: Causes and Consequences," RBA Annual Conference Volume (Discontinued), in: Christopher Kent & Jeremy Lawson (ed.),The Structure and Resilience of the Financial System, Reserve Bank of Australia.
    5. Karen E. Dynan & Donald L. Kohn, 2007. "The rise in U.S. household indebtedness: causes and consequences," Finance and Economics Discussion Series 2007-37, Board of Governors of the Federal Reserve System (U.S.).
    6. Ellis Connolly, 2007. "The Effect of the Australian Superannuation Guarantee on Household Saving Behaviour," RBA Research Discussion Papers rdp2007-08, Reserve Bank of Australia.
    7. Callan, Tim & Keane, Claire & Walsh, John R., 2009. "Pension Policy: New Evidence on Key Issues," Research Series, Economic and Social Research Institute (ESRI), number RS14, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ntj:journl:v:55:y:2002:i:3:p:597-616. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: The University of Chicago Press (email available below). General contact details of provider: https://www.ntanet.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.