Do Self-Control Measures Affect Saving Behavior?

Abstract

We examine the effects of self-control mechanisms on saving behavior using the 2013 Survey of Consumer Finances (SCF), following the assumptions of research that analyzed the 1998 SCF. Self-control mechanisms include saving goals, foreseeable expenses, and saving rules. We find a positive effect of having one or more saving rules on the likelihood of saving, and weak effects of having retirement as a saving goal and of having children/family as a saving goal on saving However, it is not clear that the measures of self-control reported in previous research really provide useful ways to increase the likelihood of saving. We discuss implications for financial planning advice.

Keywords: behavioral life cycle hypothesis, saving behavior, saving goals, saving rules, self-control, Survey of Consumer Finances

JEL Classification: D03, D14, D91