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Small Cues Change Savings Choices

Listed author(s):
  • James J. Choi
  • Emily Haisley
  • Jennifer Kurkoski
  • Cade Massey

In randomized field experiments, we embedded one- to two-sentence anchoring, goal-setting, or savings threshold cues in emails to employees about their 401(k) savings plan. We find that anchors increase or decrease 401(k) contribution rates by up to 1.9% of income. A high savings goal example raises contribution rates by up to 2.2% of income. Highlighting a higher savings threshold in the match incentive structure raises contributions by up to 1.5% of income relative to highlighting the lower threshold. Highlighting the maximum possible contribution rate raises contribution rates by up to 2.9% of income among low savers.

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File URL: http://www.nber.org/papers/w17843.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17843.

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Date of creation: Feb 2012
Handle: RePEc:nbr:nberwo:17843
Note: AG AP PE
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