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How Do Firms Respond to State Retirement Plan Mandates?

Author

Listed:
  • Adam Bloomfield
  • Kyung Min Lee
  • Jay Philbrick
  • Sita Slavov

Abstract

This paper investigates the effect of state retirement plan mandates on the supply of employer-sponsored retirement plans (ESRPs) by firms. These policies require employers to either (1) offer ESRPs to workers or (2) facilitate automatic payroll deductions that are deposited into individual retirement accounts (IRAs) established for workers by the state. In this paper, we utilize individual-level data from the Current Population Survey (CPS) and firm-level data from Form 5500 filings to examine the effect of these automatic-enrollment IRA (“auto-IRA”) policies on employer decisions to offer, and worker inclusion in, ESRPs. We exploit variation in the timing of implementation across states and firm size categories and estimate that auto-IRA policies increase the probability that an individual works for a firm with an ESRP by roughly 3 percent, and the probability that the individual participates in that ESRP by around 7 percent. These policies also increase the number of ESRP participants at the average firm in our sample by 3-5 percent.

Suggested Citation

  • Adam Bloomfield & Kyung Min Lee & Jay Philbrick & Sita Slavov, 2023. "How Do Firms Respond to State Retirement Plan Mandates?," NBER Working Papers 31398, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:31398
    Note: AG LS PE
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    More about this item

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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