Default bias and household savings

Default Bias and Financial Products
Intervention Financial Products

Can automatic programs make saving easier?

Intervention Description

Investing in a pension scheme can sometimes be hard to do independently. When comparing Danish tax records, it was shown that tax subsidies and auto-enrollments in pension scheme resulted in different outcomes. It was found that automatic programs are more effective than subsidies to increase pension savings.

Sources

Chetty et al. (2012), Active vs. Passive Decisions and Crowdout in Retirement Savings Accounts: Evidence from Denmark, NBER Working Paper

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