Brigitte Madrian|Dennis F. Shea
The Power of Suggestion: Inertia in 401(k) Participation and Savings Behavior
University of Chicago|UnitedHealth Group (United States)|UnitedHealth Group (United States)|University of Chicago
paper analyzes impact automatic enrollment 401k savings behavior two key findings first 401k participation significantly higher automatic enrollment second substantial fraction 401k participants hired automatic enrollment retain default contribution rate fund allocation even though employees hired automatic enrollment picked particular outcome default behavior appears result participant inertia employee perceptions default investment advice findings implications design 401k savings plans well type social security reform includes personal accounts individuals control also shed light generally importance economic noneconomic behavioral factors determination individual savings behavior