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Tax-Sheltered Retirement Accounts: Can Financial Education Improve Decisions?

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  • M. Martin Boyer
  • Philippe d'Astous
  • Pierre-Carl Michaud

Abstract

We conduct a stated-choice experiment to analyze the decision to contribute to front or back-loaded tax-sheltered savings accounts. Our experimental design includes a randomized financial education treatment that provides information on the two types of accounts. We assess whether respondents learn about the tax implications of these accounts, and whether they make better contribution choices when exposed to the financial education intervention. We find that, relative to a control group, our intervention improves both the understanding of the tax implications of the savings accounts (an increase of 6 to 15 points on a score of 100) and the quality of contribution decisions, improving the well-being of respondents by about 140$ in each scenario presented to them.

Suggested Citation

  • M. Martin Boyer & Philippe d'Astous & Pierre-Carl Michaud, 2019. "Tax-Sheltered Retirement Accounts: Can Financial Education Improve Decisions?," CIRANO Working Papers 2019s-10, CIRANO.
  • Handle: RePEc:cir:cirwor:2019s-10
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    References listed on IDEAS

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    More about this item

    Keywords

    Tax sheltered saving; retirement saving; financial education;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance

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