Small Cues Change Savings Choices

52 Pages Posted: 19 Mar 2012

See all articles by James J. Choi

James J. Choi

Yale School of Management; National Bureau of Economic Research (NBER)

Emily Haisley

Independent

Jennifer Kurkoski

Independent

Cade Massey

University of Pennsylvania - The Wharton School

Multiple version iconThere are 2 versions of this paper

Date Written: January 27, 2012

Abstract

In randomized field experiments, we embedded one- to two-sentence anchoring, goal-setting, or savings threshold cues in emails to employees about their 401(k) savings plan. We find that anchors increase or decrease 401(k) contribution rates by up to 1.4% of income. A high savings goal example raises contribution rates by up to 2.2% of income. Highlighting a higher savings threshold in the match incentive structure raises contributions by up to 1.5% of income relative to highlighting the lower threshold. Highlighting the maximum possible contribution rate raises contribution rates by up to 2.9% of income among low savers.

Keywords: anchoring, goal setting, retirement savings, 401(k), household finance

JEL Classification: C93, D91, E21

Suggested Citation

Choi, James J. and Haisley, Emily and Kurkoski, Jennifer and Massey, Cade, Small Cues Change Savings Choices (January 27, 2012). Available at SSRN: https://ssrn.com/abstract=2024382 or http://dx.doi.org/10.2139/ssrn.2024382

James J. Choi (Contact Author)

Yale School of Management ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Emily Haisley

Independent ( email )

No Address Available

Jennifer Kurkoski

Independent

No Address Available

Cade Massey

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

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