IDEAS home Printed from https://ideas.repec.org/a/aea/aejpol/v1y2009i1p204-28.html
   My bibliography  Save this article

Details Matter: The Impact of Presentation and Information on the Take-Up of Financial Incentives for Retirement Saving

Author

Listed:
  • Emmanuel Saez

Abstract

We examine the effects of presentation and information on the take-up of financial subsidies for retirement saving in a large randomized experiment carried out with H&R Block. The subsidies raise take-up and contributions with larger effects when the subsidy is characterized as a matching contribution rather than an equivalent-value tax credit (or cash back), and when filers are informed before the tax season about the subsidy. The results imply that both pure incentives and the presentation of those incentives affect consumer choices. (JEL D14, H24, H31, J26)

Suggested Citation

  • Emmanuel Saez, 2009. "Details Matter: The Impact of Presentation and Information on the Take-Up of Financial Incentives for Retirement Saving," American Economic Journal: Economic Policy, American Economic Association, vol. 1(1), pages 204-228, February.
    • Handle: RePEc:aea:aejpol:v:1:y:2009:i:1:p:204-28
    Note: DOI: 10.1257/pol.1.1.204
    as

    Download full text from publisher

    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/pol.1.1.204
    Download Restriction: no
    File URL: http://www.aeaweb.org/aej-policy/data/2007-0046_data.zip
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. James J. Choi & David Laibson & Brigitte C. Madrian & Andrew Metrick, 2002. "Defined Contribution Pensions: Plan Rules, Participant Choices, and the Path of Least Resistance," NBER Chapters, in: Tax Policy and the Economy, Volume 16, pages 67-114, National Bureau of Economic Research, Inc.
    2. Duflo, Esther & Saez, Emmanuel, 2002. "Participation and investment decisions in a retirement plan: the influence of colleagues' choices," Journal of Public Economics, Elsevier, vol. 85(1), pages 121-148, July.
    3. Choi, James J. & Laibson, David & Madrian, Brigitte C., 2004. "Plan Design and 401(K) Savings Outcomes," National Tax Journal, National Tax Association;National Tax Journal, vol. 57(2), pages 275-298, June.
    4. Gur Huberman & Sheena Iyengar & Wei Jiang, 2007. "Defined Contribution Pension Plans: Determinants of Participation and Contributions Rates," Journal of Financial Services Research, Springer;Western Finance Association, vol. 31(1), pages 1-32, February.
    5. Catherine C. Eckel & Philip J. Grossman, 2006. "Do Donors Care about Subsidy Type? An Experimental Study," Research in Experimental Economics, in: Experiments Investigating Fundraising and Charitable Contributors, pages 157-175, Emerald Group Publishing Limited.
    6. Douglas Davis & Edward Millner & Robert Reilly, 2005. "Subsidy Schemes and Charitable Contributions: A Closer Look," Experimental Economics, Springer;Economic Science Association, vol. 8(2), pages 85-106, June.
    7. Catherine C. Eckel & Philip J. Grossman, 2006. "Subsidizing Charitable Giving with Rebates or Matching: Further Laboratory Evidence," Southern Economic Journal, John Wiley & Sons, vol. 72(4), pages 794-807, April.
    8. Lawrence F. Katz & Jeffrey R. Kling & Jeffrey B. Liebman, 2001. "Moving to Opportunity in Boston: Early Results of a Randomized Mobility Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(2), pages 607-654.
    9. Douglas D. Davis & Edward L. Millner, 2005. "Rebates, Matches, and Consumer Behavior," Southern Economic Journal, John Wiley & Sons, vol. 72(2), pages 410-421, October.
    10. Engelhardt, Gary V. & Kumar, Anil, 2007. "Employer matching and 401(k) saving: Evidence from the health and retirement study," Journal of Public Economics, Elsevier, vol. 91(10), pages 1920-1943, November.
    11. Esther Duflo & William Gale & Jeffrey Liebman & Peter Orszag & Emmanuel Saez, 2006. "Saving Incentives for Low- and Middle-Income Families: Evidence from a Field Experiment with H&R Block," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(4), pages 1311-1346.
    12. Douglas D. Davis & Edward L. Millner, 2005. "Rebates, Matches, and Consumer Behavior," Southern Economic Journal, John Wiley & Sons, vol. 72(2), pages 410-421, October.
    13. James J. Choi & David Laibson & Brigitte C. Madrian & Andrew Metrick, 2001. "Defined Contribution Pensions: Plan Rules, Participant Decisions, and the Path of Least Resistance," NBER Working Papers 8655, National Bureau of Economic Research, Inc.
    14. Catherine C. Eckel & Philip J. Grossman, 2006. "Subsidizing Charitable Contributions in the Field: Evidence from a Non-Secular Charity," Monash Economics Working Papers archive-44, Monash University, Department of Economics.
    15. Marianne Bertrand & Dean S. Karlan & Sendhil Mullainathan & Eldar Shafir & Jonathan Zinman, 2005. "What's Psychology Worth? A Field Experiment in the Consumer Credit Market," Working Papers 918, Economic Growth Center, Yale University.
    16. Marianne Bertrand & Dean Karlan & Sendhil Mullainathan & Eldar Shafir & Jonathan Zinman, 2010. "What's Advertising Content Worth? Evidence from a Consumer Credit Marketing Field Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(1), pages 263-306.
    17. Catherine C. Eckel & Philip J. Grossman, 2006. "Subsidizing Charitable Giving with Rebates or Matching: Further Laboratory Evidence," Southern Economic Journal, John Wiley & Sons, vol. 72(4), pages 794-807, April.
    18. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    19. Eckel, Catherine C. & Grossman, Philip J., 2003. "Rebate versus matching: does how we subsidize charitable contributions matter?," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 681-701, March.
    20. Davis, Douglas D., 2006. "Rebate subsidies, matching subsidies and isolation effects," Judgment and Decision Making, Cambridge University Press, vol. 1(1), pages 13-22, July.
    21. Catherine Eckel, 2005. "Subsidizing Charitable Contributions: A Field Test Comparing Matching and Rebate Subsidies," Working Papers 2098, The Field Experiments Website.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Johannes Diederich & Catherine C. Eckel & Raphael Epperson & Timo Goeschl & Philip J. Grossman, 2022. "Subsidizing unit donations: matches, rebates, and discounts compared," Experimental Economics, Springer;Economic Science Association, vol. 25(2), pages 734-758, April.
    2. Davis, Douglas D., 2006. "Rebate subsidies, matching subsidies and isolation effects," Judgment and Decision Making, Cambridge University Press, vol. 1(1), pages 13-22, July.
    3. Eckel, Catherine & Grossman, Philip J., 2017. "Comparing rebate and matching subsidies controlling for donors’ awareness: Evidence from the field," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 66(C), pages 88-95.
    4. Mitchell, O.S. & Piggott, J., 2016. "Workplace-Linked Pensions for an Aging Demographic," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 865-904, Elsevier.
    5. Deck, Cary & Murphy, James J., 2019. "Donors change both their level and pattern of giving in response to contests among charities," European Economic Review, Elsevier, vol. 112(C), pages 91-106.
    6. Catherine Eckel, 2005. "Subsidizing Charitable Contributions: A Field Test Comparing Matching and Rebate Subsidies," Working Papers 2098, The Field Experiments Website.
    7. repec:cup:judgdm:v:1:y:2006:i::p:13-22 is not listed on IDEAS
    8. Johannes Hagen & Daniel Hallberg & Gabriella Sjögren, 2022. "A Nudge to Quit? The Effect of a Change in Pension Information on Annuitisation, Labour Supply and Retirement Choices Among Older Workers," The Economic Journal, Royal Economic Society, vol. 132(643), pages 1060-1094.
    9. Seiyoun Kim & Vjollca Sadiraj & Yongsheng Xu, 2024. "Tax Framing in Matching and Rebate Subsidy," Experimental Economics Center Working Paper Series 2023-01, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.
    10. Catherine C. Eckel & Philip J. Grossman, 2006. "Subsidizing Charitable Contributions in the Field: Evidence from a Non-Secular Charity," Monash Economics Working Papers archive-44, Monash University, Department of Economics.
    11. Douglas D. Davis, 2006. "Rebate subsidies, matching subsidies and isolation effects," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 1, pages 13-22, July.
    12. Gary V. Engelhardt & Anil Kumar, 2007. "Employer Matching and 401(k) Saving: Evidence from the Health and Retirement Study," NBER Chapters, in: Public Policy and Retirement, Trans-Atlantic Public Economics Seminar (TAPES), pages 1920-1943, National Bureau of Economic Research, Inc.
    13. Peng, Hui-Chun, 2020. "Effect of cognitive ability on matching and rebate subsidies," Research in Economics, Elsevier, vol. 74(1), pages 19-25.
    14. Amromin, Gene & Huang, Jennifer & Sialm, Clemens, 2007. "The tradeoff between mortgage prepayments and tax-deferred retirement savings," Journal of Public Economics, Elsevier, vol. 91(10), pages 2014-2040, November.
    15. Halit Yanıkkaya & Zeynep Aktaş Koral & Sadettin Haluk Çitçi, 2023. "The Power of Financial Incentives versus the Power of Suggestion for Individual Pension: Are Financial Incentives or Automatic Enrollment Policies More Effective?," Sustainability, MDPI, vol. 15(4), pages 1-18, February.
    16. Diederich, Johannes & Eckel, Catherine C. & Epperson, Raphael & Goeschl, Timo & Grossman, Philip J., 2019. "Subsidizing Quantity Donations: Matches, Rebates, and Discounts Compared," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203650, Verein für Socialpolitik / German Economic Association.
    17. Keenan Dworak-Fisher, 2011. "Matching Matters in 401(k) Plan Participation," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 50(4), pages 713-737, October.
    18. repec:jdm:journl:v:17:y:2022:i:5:p:1058-1071 is not listed on IDEAS
    19. Shusaku Sasaki & Hirofumi Kurokawa & Fumio Ohtake, 2022. "An experimental comparison of rebate and matching in charitable giving: The case of Japan," The Japanese Economic Review, Springer, vol. 73(1), pages 147-177, January.
    20. Kendra Strauss, 2009. "Cognition, Context, and Multimethod Approaches to Economic Decision Making," Environment and Planning A, , vol. 41(2), pages 302-317, February.
    21. repec:cup:judgdm:v:17:y:2022:i:5:p:1058-1071 is not listed on IDEAS
    22. Mason, Richard, 2019. "Digital enrollment architecture and retirement savings decisions: Evidence from the field," Other publications TiSEM 58639618-e34e-4b5c-8c8c-a, Tilburg University, School of Economics and Management.
    23. Neslihan Uler, 2011. "Public goods provision, inequality and taxes," Experimental Economics, Springer;Economic Science Association, vol. 14(3), pages 287-306, September.

    More about this item

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

    Lists

    This item is featured on the following reading lists, Wikipedia, or ReplicationWiki pages:
    1. Details Matter: The Impact of Presentation and Information on the Take-Up of Financial Incentives for Retirement Saving (American Economic Journal: Economic Policy 2009) in ReplicationWiki

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aejpol:v:1:y:2009:i:1:p:204-28. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.