Who Takes Advantage of Tax-Deferred Saving Programs? Evidence from Federal Income Tax Data

37 Pages Posted: 8 Jan 2002

See all articles by David Joulfaian

David Joulfaian

U.S. Department of the Treasury, Office of Tax Analysis (OTA); Georgetown University - Department of Economics

David P. Richardson

U.S. Department of the Treasury, Office of Tax Analysis (OTA)

Abstract

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.

Keywords: Defined Contributions, Plan Choices, Participation Rates

JEL Classification: H550, D910

Suggested Citation

Joulfaian, David and Richardson, David P., Who Takes Advantage of Tax-Deferred Saving Programs? Evidence from Federal Income Tax Data. National Tax Journal, Vol. 54, No. 3, Pp. 669-88, September 2001. Available at SSRN: https://ssrn.com/abstract=296130

David Joulfaian (Contact Author)

U.S. Department of the Treasury, Office of Tax Analysis (OTA) ( email )

1500 Pennsylvania Ave. NW
Washington, DC 20220
United States

Georgetown University - Department of Economics ( email )

37th St NW & O St NW
Washington, DC 20007
United States

David P. Richardson

U.S. Department of the Treasury, Office of Tax Analysis (OTA) ( email )

1500 Pennsylvania Ave. NW
Washington, DC 20220
United States
202-622-0234 (Phone)

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