$100 bills on the sidewalk
Subtitle: suboptimal saving in 401(k) plans
By: James J. Choi, David Laibson, Brigitte C. Madrian.
Contributors: Laibson, David I.; Madrian, Brigitte C.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 11554; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 11554.
Publisher: National Bureau of Economic Research
Published: 2005
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: 401(k) plans -- Mathematical models.; Saving and investment -- Mathematical models.
Other titles: One hundred dollar bills on the sidewalk
Description: "It is typically difficult to determine whether households save optimally.  But in some cases, savings incentives are strong enough to imply sharp normative restrictions.  We consider employees who receive employer matching contributions in their 401(k) plan and are allowed to make discretionary, penalty-free, in-service withdrawals.  For these employees, contributing below the match threshold is a dominated action.  Nevertheless, half of employees with these clear-cut incentives do contribute below the match threshold, foregoing matching contributions that average 1.3% of their annual pay.  Providing these "undersavers" with specific information about the free lunch they are giving up fails to raise their contribution rates"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
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