Who Takes Advantage of Tax-Deferred Saving Programs? Evidence from Federal Income Tax Data
Government of the United States of America - Department of the Treasury - Office of Tax Analysis
David P. Richardson
Government of the United States of America - Office of Tax Analysis
National Tax Journal, Vol. 54, No. 3, Pp. 669-88, September 2001
This paper provides insight into the attributes of wage-earning households that participate in tax-deferred retirement savings plans. Examining data from federal tax returns, we find that approximately 52 percent of individuals and 55 percent of households participated in a retirement savings program in 1996. Excluding households with wages within the 1996 poverty thresholds and individuals under age 21 or over age 70, the age-wage restricted participation rates were 66 percent and 79 percent for individuals and households, respectively. Estimating probit equations, we find that households with a single-earner or having dependents are less likely to participate in a plan. Higher wage-earnings, non-labor income, and marginal tax rates tend to increase the probability of participation.
Number of Pages in PDF File: 37
Keywords: Defined Contributions, Plan Choices, Participation Rates
JEL Classification: H550, D910Accepted Paper Series
Date posted: January 8, 2002
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