When Nudges are Forever: Inertia in the Swedish Premium Pension Plan

14 Pages Posted: 17 Jan 2018  

Henrik Cronqvist

University of Miami - Department of Finance

Richard H. Thaler

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Frank Yu

China Europe International Business School

Date Written: January 10, 2018

Abstract

To inform economists and policy makers about whether the effects of nudges are persistent in one specific context, we study the choice architecture of the Swedish Premium Pension Plan. The data we study consist of all initial choices and subsequent rebalancing activities by the entire population of 7.3 million retirement savers in Sweden during the period 2000 to 2016. Based on our analysis of these data, we conclude that the effects of nudging in this case were surprisingly persistent and seem to last nearly two decades, if not forever.

Keywords: behavioral economics, retirement saving, pension, nudge, default choice

JEL Classification: G02, D14, D03

Suggested Citation

Cronqvist, Henrik and Thaler, Richard H. and Yu, Frank, When Nudges are Forever: Inertia in the Swedish Premium Pension Plan (January 10, 2018). Available at SSRN: https://ssrn.com/abstract=3099886 or http://dx.doi.org/10.2139/ssrn.3099886

Henrik Cronqvist

University of Miami - Department of Finance ( email )

5250 University Drive
314-E Jenkins Building
Coral Gables, FL 33146
United States
(305) 284-9482 (Phone)

HOME PAGE: http://sites.google.com/site/henrikcronqvist/

Richard H. Thaler (Contact Author)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-5208 (Phone)
773-702-0458 (Fax)

Fang Yu

China Europe International Business School ( email )

669 Hongfeng Road
Pudong
Shanghai, 201206
China

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