The Role of Information and Social Interactions in Retirement Plan Decisions: Evidence from a Randomized Experiment

53 Pages Posted: 11 Apr 2002 Last revised: 21 Oct 2008

See all articles by Esther Duflo

Esther Duflo

Massachusetts Institute of Technology (MIT) - Department of Economics; Abdul Latif Jameel Poverty Action Lab (J-PAL); National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); Bureau for Research and Economic Analysis of Development (BREAD)

Emmanuel Saez

University of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: April 2002

Abstract

This paper analyzes a randomized experiment to shed light on the role of information and social interactions in employees' decisions to enroll in a Tax Deferred Account (TDA) retirement plan within a large university. The experiment encouraged a random sample of employees in a subset of departments to attend a benefits information fair organized by the university, by promising a monetary reward for attendance. The experiment more than tripled the attendance rate of these treated individuals (relative to controls), and doubled that of untreated individuals within departments where some individuals were treated. TDA enrollment 5 and 11 months after the fair was significantly higher in departments where some individuals were treated than in departments where nobody was treated. However, the effect on TDA enrollment is almost as large for individuals in treated departments who did not receive the encouragement as for those who did. We provide three interpretations, differential treatment effects, social network effects, and motivational reward effects, to account for these results.

Suggested Citation

Duflo, Esther and Saez, Emmanuel, The Role of Information and Social Interactions in Retirement Plan Decisions: Evidence from a Randomized Experiment (April 2002). NBER Working Paper No. w8885. Available at SSRN: https://ssrn.com/abstract=307122

Esther Duflo (Contact Author)

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Emmanuel Saez

University of California, Berkeley - Department of Economics ( email )

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