IDEAS home Printed from https://ideas.repec.org/h/nbr/nberch/11310.html
   My bibliography  Save this book chapter

Reducing the Complexity Costs of 401(k) Participation Through Quick Enrollment

In: Developments in the Economics of Aging

Author

Listed:
  • James J. Choi
  • David Laibson
  • Brigitte C. Madrian

Abstract

The complexity of the retirement savings decision may overwhelm employees, encouraging procrastination and reducing 401(k) enrollment rates. We study a low-cost manipulation designed to simplify the 401(k) enrollment process. Employees are given the option to make a Quick Enrollment [TM] election to enroll in their 401(k) plan at a pre-selected contribution rate and asset allocation. By decoupling the participation decision from the savings rate and asset allocation decisions, the Quick Enrollment [TM] mechanism simplifies the savings plan decision process. We find that at one company, Quick Enrollment[TM] tripled 401(k)participation rates among new employees three months after hire. When Quick Enrollment [TM] was offered to previously hired non-participating employees at two firms, participation increased by 10 to 20 percentage points among those employees affected.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • James J. Choi & David Laibson & Brigitte C. Madrian, 2009. "Reducing the Complexity Costs of 401(k) Participation Through Quick Enrollment," NBER Chapters,in: Developments in the Economics of Aging, pages 57-82 National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:11310
    as

    Download full text from publisher

    File URL: http://www.nber.org/chapters/c11310.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gabriel D. Carroll & James J. Choi & David Laibson & Brigitte C. Madrian & Andrew Metrick, 2009. "Optimal Defaults and Active Decisions," The Quarterly Journal of Economics, Oxford University Press, vol. 124(4), pages 1639-1674.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Beshears, John & Choi, James J. & Laibson, David & Madrian, Brigitte C., 2011. "Behavioral economics perspectives on public sector pension plans," Journal of Pension Economics and Finance, Cambridge University Press, vol. 10(02), pages 315-336, April.
    2. repec:eee:hapoch:v1_865 is not listed on IDEAS
    3. Brigitte C. Madrian, 2009. "Comment on "Who Chooses Defined Contribution Plans?"," NBER Chapters,in: Social Security Policy in a Changing Environment, pages 162-165 National Bureau of Economic Research, Inc.
    4. Dohmen, Thomas, 2014. "Behavioral labor economics: Advances and future directions," Labour Economics, Elsevier, vol. 30(C), pages 71-85.
    5. Bolton, Gary E. & Ockenfels, Axel, 2012. "Behavioral economic engineering," Journal of Economic Psychology, Elsevier, vol. 33(3), pages 665-676.
    6. Cappelletti, Giuseppe & Guazzarotti, Giovanni & Tommasino, Pietro, 2014. "The effect of age on portfolio choices: evidence from an Italian pension fund," Journal of Pension Economics and Finance, Cambridge University Press, vol. 13(04), pages 389-419, October.

    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:nbr:nberch:11310. 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: (). General contact details of provider: http://edirc.repec.org/data/nberrus.html .

    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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.