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The Incidence of Workplace Pensions: Evidence from the UK's Automatic Enrollment Mandate

Author

Listed:
  • Rachel Scarfe
  • Daniel Schäfer
  • Thomas Sulka

Abstract

We examine who bears the costs of mandated workplace pension programs, exploiting the quasi-experimental rollout of automatic enrollment in the UK. Total compensation (take-home pay plus employer contributions) increases, driven by employer contributions, while the amount of take-home pay decreases. These effects differ by employer size, with take-home pay declining to an extent in the largest firms that we can rule out a pass-through to employees of more than 47%, significantly less than in smaller firms. Our findings provide the first evidence that large employers shift the cost of mandated automatic enrollment onto employees.

Suggested Citation

  • Rachel Scarfe & Daniel Schäfer & Thomas Sulka, 2024. "The Incidence of Workplace Pensions: Evidence from the UK's Automatic Enrollment Mandate," Economics working papers 2024-02, Department of Economics, Johannes Kepler University Linz, Austria.
    • Handle: RePEc:jku:econwp:2024-02
    Note: English
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    File URL: http://www.econ.jku.at/papers/2024/wp2402.pdf
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    More about this item

    Keywords

    Employer-sponsored retirement savings; Incentive design; Mandated benefits; Staggered difference-in-differences;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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