Savings Incentives and Investment Management Fees: A Study of the 529 College Savings Plan Market
Vicki L. Bogan
Contemporary Economic Policy, Forthcoming
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.
Number of Pages in PDF File: 33
JEL Classification: G10, G11, H24, I22Accepted Paper Series
Date posted: June 16, 2008 ; Last revised: October 23, 2013
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