scholarly journals Active vs. Passive Decisions and Crowdout in Retirement Savings Accounts: Evidence from Denmark

2012 ◽  
Author(s):  
Raj Chetty ◽  
John Friedman ◽  
Soren Leth-Petersen ◽  
Torben Nielsen ◽  
Tore Olsen
Keyword(s):  
Retirement Savings ◽  
Savings Accounts

scholarly journals Active vs. Passive Decisions and Crowd-Out in Retirement Savings Accounts: Evidence from Denmark *

2014 ◽  
Vol 129 (3) ◽  
pp. 1141-1219 ◽  
Author(s):  
Raj Chetty ◽  
John N. Friedman ◽  
Søren Leth-Petersen ◽  
Torben Heien Nielsen ◽  
Tore Olsen
Keyword(s):  
Government Expenditure ◽  
Wealth Accumulation ◽  
Retirement Savings ◽  
Total Saving ◽  
Savings Accounts ◽  
Retirement Accounts ◽  
Tax Subsidies ◽  
Crowd Out ◽  
Savings Rates

Abstract Using 41 million observations on savings for the population of Denmark, we show that the effects of retirement savings policies on wealth accumulation depend on whether they change savings rates by active or passive choice. Subsidies for retirement accounts, which rely on individuals to take an action to raise savings, primarily induce individuals to shift assets from taxable accounts to retirement accounts. We estimate that each $1 of government expenditure on subsidies increases total saving by only 1 cent. In contrast, policies that raise retirement contributions if individuals take no action—such as automatic employer contributions to retirement accounts—increase wealth accumulation substantially. We estimate that approximately 15% of individuals are “active savers” who respond to tax subsidies primarily by shifting assets across accounts; 85% of individuals are “passive savers” who are unresponsive to subsidies but are instead heavily influenced by automatic contributions made on their behalf. Active savers tend to be wealthier and more financially sophisticated. We conclude that automatic contributions are more effective at increasing savings rates than subsidies for three reasons: (i) subsidies induce relatively few individuals to respond, (ii) they generate substantial crowd-out conditional on response, and (iii) they do not increase the savings of passive individuals, who are least prepared for retirement.

Optimal Retirement Policies with Present-Biased Agents

2020 ◽  
Author(s):  
Pei Cheng Yu
Keyword(s):  
Private Information ◽  
Hyperbolic Discounting ◽  
Time Inconsistency ◽  
Retirement Savings ◽  
Present Bias ◽  
Optimal Mechanism ◽  
Savings Accounts ◽  
The Government ◽  
Social Security Benefits ◽  
Retirement Policies

Abstract This paper incorporates quasi–hyperbolic discounting into a Mirrlees taxation model to study the design of retirement policies for present-biased agents. I show that the government can improve the screening of productivity by exploiting time inconsistency. This is done by providing commitment to sophisticated agents and taking advantage of the incorrect beliefs of naïve agents. This can be achieved even if the degrees of present bias and sophistication are private information. I also demonstrate how the government can implement the optimal mechanism using retirement savings accounts and social security benefits.

Budgets may curtail US nuclear forces

2015 ◽  
Keyword(s):  
The United States ◽  
Retirement Savings ◽  
Nuclear Forces ◽  
Content Type ◽  
Nuclear Arsenal ◽  
Personnel Costs ◽  
Savings Accounts ◽  
Trade Offs ◽  
The Us ◽  
The Military

Subject Upgrading the US nuclear arsenal. Significance The United States is undertaking the most comprehensive modernisation of its nuclear forces since the 1970s and 1980s. Over the next ten years, annual US spending on nuclear weapons is projected to increase from about 15 billion dollars to 25 billion dollars per year to upgrade the three legs of the US nuclear arsenal: land-based missiles, submarine-based missiles and strategic bombers. This recapitalisation is considered necessary to sustain deterrence against growing strategic threats from Russia and China and regional nuclear threats from North Korea, but will entail trade-offs among other military assets far more likely to be used in any conflict. Impacts Russian rhetoric towards Ukraine and eastern Europe will strengthen the hands of pro-nuclear lobbies in Washington. Greater nuclear spending will increase the drive to find savings in military personnel costs. By shifting pensions to retirement savings accounts, it will increase the attractiveness of the military as a mid-career employment option.

Promoting public retirement savings accounts during tax filing: evidence from field experiments

2021 ◽  
pp. 1-28
Author(s):  
Stephen Roll ◽  
Sam Bufe ◽  
Olga Kondratjeva ◽  
Michal Grinstein-Weiss
Keyword(s):  
Low Income ◽  
Income Tax ◽  
Field Experiments ◽  
Retirement Savings ◽  
Persuasive Messages ◽  
Savings Accounts ◽  
Treasury Department ◽  
The U.S ◽  
Tax Filing

Abstract In 2015, the U.S. Treasury Department launched myRA, a no-fee retirement account designed for people who lacked employer-sponsored retirement options. We report findings from two behavioral field experiments intended to motivate interest in using the tax refund to open and fund myRAs directly through the tax-filing process. These experiments, administered to more than 100,000 low-income tax filers in 2016, embedded persuasive messages in emails sent to filers and directly within online tax-filing software. We find that interest in myRA was generally very low, although interest and enrollment intentions varied depending on the framing of the program's benefits.

scholarly journals Mandatory Savings

2019 ◽  
Vol 15 (1) ◽  
Author(s):  
Robert MacCulloch
Keyword(s):  
New Zealand ◽  
Policy Change ◽  
Productivity Growth ◽  
Public Spending ◽  
Wealth Inequality ◽  
Retirement Savings ◽  
Transfer Payments ◽  
Fair Treatment ◽  
Savings Accounts ◽  
Set Up

New Zealand faces an impending cost spiral of public spending on healthcare and pensions, as well as ongoing and substantial payments to those out of work. None of the solutions conventionally proffered, such as generating markedly higher productivity growth or levying significantly higher taxes, seems plausible. Mandatory savings accounts, however, offer more promise. Ending unnecessary transfer payments to businesses and wealthy individuals would allow health, out-of-work and retirement savings accounts to be set up and funded for all individuals. This policy change could secure the future welfare needs of low earners, enhancing opportunity, dignity, choice and fair treatment. It would also alleviate fiscal pressures, encourage efficiency gains and reduce wealth inequality.

scholarly journals Rationalizing the Canadian Income Tax System

2019 ◽  
pp. 643-666
Author(s):  
Robin Boadway
Keyword(s):  
Tax Policy ◽  
Income Tax ◽  
Retirement Savings ◽  
Corporate Tax ◽  
Tax Reforms ◽  
Tax System ◽  
Goods And Services ◽  
Savings Accounts ◽  
The United Kingdom ◽  
Equity And Efficiency

The Canadian tax system is based on principles informed by the Carter report, and these principles have been challenged as circumstances have changed and ideas about tax policy have evolved. The personal tax system pays only lip service to the comprehensive income tax ideal, and the corporate tax is designed as a complement to a comprehensive tax system that does not exist. Canadian policy makers face the unprecedented challenges of (1) globalization, (2) an economy increasingly based on services and technology, and (3) growing inequality of income, wealth, and opportunity. Modern principles of tax design are reflected in recent tax reform proposals recommended by the Mirrlees review in the United Kingdom. Major tax reforms have been undertaken in other member countries of the Organisation for Economic Co-operation and Development. Some piecemeal innovations in tax policy have been implemented in Canada, such as registered retirement savings plans, tax-free savings accounts, the goods and services tax/harmonized sales tax, and refundable tax credits, but these measures have not been coordinated. The corporate tax structure has changed only modestly. This paper explores options for feasible reform of the Canadian tax system that might enhance equity and efficiency.

scholarly journals Promoting Public Retirement Savings Accounts during Tax Filing: Evidence from a Field Experiment

2020 ◽  
Author(s):  
Stephen Roll ◽  
Michal Grinstein-Weiss ◽  
Olga Kondratjeva ◽  
Sam Bufe
Keyword(s):  
Field Experiment ◽  
Retirement Savings ◽  
Savings Accounts ◽  
Tax Filing
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