IDEAS home Printed from https://ideas.repec.org/a/bla/coecpo/v32y2014i4p826-842.html
   My bibliography  Save this article

Savings Incentives And Investment Management Fees: A Study Of The 529 College Savings Plan Market

Author

Listed:
  • VICKI L. BOGAN

Abstract

type="main" xml:lang="en"> This paper analyzes the 529 College Savings Plan market using a plan level panel data set covering the years 2002–2006. The results show evidence of limited market competition and a positive relationship between state tax benefits and 529 plan fees. A $100 increase in potential taxable income benefit from investing in a 529 plan is associated with a 3–6 basis point increase in investment management fees for direct-sold 529 College Savings Plans. This suggests that government policies designed to make college more affordable could enable investment firms to charge excess fees. (JEL G11, H24, I22)

Suggested Citation

  • Vicki L. Bogan, 2014. "Savings Incentives And Investment Management Fees: A Study Of The 529 College Savings Plan Market," Contemporary Economic Policy, Western Economic Association International, vol. 32(4), pages 826-842, October.
    • Handle: RePEc:bla:coecpo:v:32:y:2014:i:4:p:826-842
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/coep.12052
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dellva, Wilfred L & Olson, Gerard T, 1998. "The Relationship between Mutual Fund Fees and Expenses and Their Effects on Performance," The Financial Review, Eastern Finance Association, vol. 33(1), pages 85-103, February.
    2. Dynarski, Susan, 2004. "Who Benefits From the Education Saving Incentives? Income, Educational Expectations and the Value of the 529 and Coverdell," National Tax Journal, National Tax Association;National Tax Journal, vol. 57(2), pages 359-383, June.
    3. James M. Poterba, 1984. "Tax Subsidies to Owner-Occupied Housing: An Asset-Market Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 99(4), pages 729-752.
    4. Susan Dynarski, 2004. "Tax Policy and Education Policy: Collision or Coordination? A Case Study of the 529 and Coverdell Saving Incentives," NBER Chapters, in: Tax Policy and the Economy, Volume 18, pages 81-116, National Bureau of Economic Research, Inc.
    5. Jonathan Gruber & James M. Poterba, 1993. "Tax Incentives and the Decision to Purchase Health Insurance: Evidence from the Self-Employed," NBER Working Papers 4435, National Bureau of Economic Research, Inc.
    6. Jonathan Gruber & James Poterba, 1994. "Tax Incentives and the Decision to Purchase Health Insurance: Evidence from the Self-Employed," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(3), pages 701-733.
    7. Peter Brady & Julie-Anne Cronin & Scott Houser, 2003. "Regional Differences in the Utilization of the Mortgage Interest Deduction," Public Finance Review, , vol. 31(4), pages 327-366, July.
    8. Dynarski, Susan, 2004. "Tax Policy and Education Policy: Collision or Coordination? A Case Study of 529 and Coverdell Savings Vehicles," Working Paper Series rwp04-011, Harvard University, John F. Kennedy School of Government.
    9. Austan Goolsbee, 1998. "Investment Tax Incentives, Prices, and the Supply of Capital Goods," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(1), pages 121-148.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Balthrop, Justin & Cici, Gjergji, 2022. "Conflicting incentives in the management of 529 plans," CFR Working Papers 22-06, University of Cologne, Centre for Financial Research (CFR).

    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. Sinai, Todd & Gyourko, Joseph, 2004. "The asset price incidence of capital gains taxes: evidence from the Taxpayer Relief Act of 1997 and publicly-traded real estate firms," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1543-1565, July.
    2. Fossen, Frank M. & König, Johannes, 2015. "Public health insurance and entry into self-employment," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112934, Verein für Socialpolitik / German Economic Association.
    3. Giovanni Millo & Gaetano Carmeci, 2011. "Non-life insurance consumption in Italy: a sub-regional panel data analysis," Journal of Geographical Systems, Springer, vol. 13(3), pages 273-298, September.
    4. Gulcin Gumus & Tracy Regan, 2007. "Self-Employment and the Role of Health Insurance," Working Papers 0910, University of Miami, Department of Economics.
    5. Håkan Selin, 2012. "Marginal Tax Rates and Tax‐Favoured Pension Savings of the Self‐Employed: Evidence from Sweden," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(1), pages 79-100, March.
    6. Melissa A. Thomasson, 2003. "The Importance of Group Coverage: How Tax Policy Shaped U.S. Health Insurance," American Economic Review, American Economic Association, vol. 93(4), pages 1373-1384, September.
    7. David Roodman & James G. MacKinnon & Morten Ørregaard Nielsen & Matthew D. Webb, 2019. "Fast and wild: Bootstrap inference in Stata using boottest," Stata Journal, StataCorp LP, vol. 19(1), pages 4-60, March.
    8. Velamuri, Malathi, 2009. "Taxes, Health Insurance and Women’s Self-Employment," MPRA Paper 15731, University Library of Munich, Germany.
    9. Joni Hersch, 2004. "A Workers' Lobby to Provide Portable Benefits," NBER Chapters, in: Emerging Labor Market Institutions for the Twenty-First Century, pages 207-228, National Bureau of Economic Research, Inc.
    10. Sun, Chuanwang & Zhan, Yanhong & Du, Gang, 2020. "Can value-added tax incentives of new energy industry increase firm's profitability? Evidence from financial data of China's listed companies," Energy Economics, Elsevier, vol. 86(C).
    11. Robert Town & Douglas Wholey & Roger Feldman & Lawton R. Burns, 2006. "The Welfare Consequences of Hospital Mergers," NBER Working Papers 12244, National Bureau of Economic Research, Inc.
    12. Saltzman, Evan, 2019. "Demand for health insurance: Evidence from the California and Washington ACA exchanges," Journal of Health Economics, Elsevier, vol. 63(C), pages 197-222.
    13. Craig, Stuart V. & Ericson, Keith Marzilli & Starc, Amanda, 2021. "How important is price variation between health insurers?," Journal of Health Economics, Elsevier, vol. 77(C).
    14. Marjorie Honig & Irena Dushi, 2005. "Household Demand for Health Insurance: Price and Spouse's Coverage," Economics Working Paper Archive at Hunter College 411, Hunter College Department of Economics.
    15. Parry, Ian W.H., 1999. "Tax Deductions, Consumption Distortions, and the Marginal Excess Burden of Taxation," Discussion Papers 10801, Resources for the Future.
    16. Michael Smart & Mark Stabile, 2005. "Tax credits, insurance, and the use of medical care," Canadian Journal of Economics, Canadian Economics Association, vol. 38(2), pages 345-365, May.
    17. Jennifer Alonso Garcia & Michael Sherris & Samuel Thirurajah & Jonathan Ziveyi, 2020. "Taxation and policyholder behavior: the case of guaranteed minimum accumulation benefits," ULB Institutional Repository 2013/307889, ULB -- Universite Libre de Bruxelles.
    18. Dahlia K. Remler & Joshua Graff Zivin & Sherry A. Glied, 2004. "Modeling health insurance expansions: Effects of alternate approaches," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 23(2), pages 291-313.
    19. Alison J. Wellington, 2001. "Health Insurance Coverage And Entrepreneurship," Contemporary Economic Policy, Western Economic Association International, vol. 19(4), pages 465-478, October.
    20. James M. Poterba, 1996. "Government Intervention in the Markets for Education and Health Care: How and Why?," NBER Chapters, in: Individual and Social Responsibility: Child Care, Education, Medical Care, and Long-Term Care in America, pages 277-308, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

    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:bla:coecpo:v:32:y:2014:i:4:p:826-842. 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: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/weaaaea.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.