Raj Chetty|John N. Friedman|Søren Leth?Petersen|Torben Heien Nielsen|Tore Vincents Olsen
Active vs. Passive Decisions and Crowd-Out in Retirement Savings Accounts: Evidence from Denmark *
Harvard University Press|University of Copenhagen|Harvard University|Harvard University Press|University of Copenhagen|Harvard University|Harvard University Press|University of Copenhagen|Harvard University
abstract using 41 million observations savings population denmark show effects retirement savings policies wealth accumulation depend whether change savings rates active passive choice subsidies retirement accounts rely individuals take action raise savings primarily induce individuals shift assets taxable accounts retirement accounts estimate 1 government expenditure subsidies increases total saving 1 cent contrast policies raise retirement contributions individuals take actionsuch automatic employer contributions retirement accountsincrease wealth accumulation substantially estimate approximately 15 individuals active savers respond tax subsidies primarily shifting assets across accounts 85 individuals passive savers unresponsive subsidies instead heavily influenced automatic contributions made behalf active savers tend wealthier financially sophisticated conclude automatic contributions effective increasing savings rates subsidies three reasons subsidies induce relatively individuals respond ii generate substantial crowdout conditional response iii increase savings passive individuals least prepared retirement