Pension contributions, pension awareness, and changing personal finances

TitlePension contributions, pension awareness, and changing personal finances
Publication TypeJournal Article
Year of PublicationForthcoming
AuthorsLay, MJ
JournalContemporary Economic Policy
Date PublishedAug-01-2020
KeywordsFinances, Financial literacy, Pensions
Abstract

Workers with 401(k)s and similar defined contribution pensions adjust contributions facing large fluctuations in personal finances. Using administrative tax records linked to the Health and Retirement Study, this paper shows that adjustments differ for contributors who are aware and unaware of their pension coverage. Unaware contributors are more likely to stop contributing facing deteriorating finances, but adjust contributions similarly along the intensive margin. For example, 25% of unaware contributors stop contributing facing earnings declines, but only 15% of aware contributors do so. These findings have implications for policies like automatic enrollment and information campaigns that encourage retirement savings.

URLhttp://doi.wiley.com/10.1111/coep.12420http://onlinelibrary.wiley.com/wol1/doi/10.1111/coep.12420/fullpdfhttps://api.wiley.com/onlinelibrary/tdm/v1/articles/10.1111%2Fcoep.12420
DOI10.1111/coep.12420
Short TitleContemp Econ Policy
Citation Key9958