Catching Up or Crowding Out? The Crowd-Out Effects of Catch-Up Retirement Contributions on Non-Retirement Saving

51 Pages Posted: 3 Mar 2020 Last revised: 21 May 2020

See all articles by Lucas Goodman

Lucas Goodman

U.S. Department of the Treasury

Date Written: May 12, 2020

Abstract

Using tax data, this paper exploits a discontinuous increase in retirement contribution limits based on exact date of birth. This paper finds clear evidence that constrained individuals increase their retirement saving when so eligible, but fi nds no evidence suggesting that non-retirement saving falls. In the baseline specifications, one can rule out crowd-out greater than approximately 0.38 to 0.57 at the 95 percent confidence level depending on the measure used. This suggests that the additional contributions induced by catch-up eligibility represent an increase in total private saving.

Keywords: Retirement, crowd-out, regression discontinuity, catch-up, 401(k)

JEL Classification: D14, D15, H24

Suggested Citation

Goodman, Lucas, Catching Up or Crowding Out? The Crowd-Out Effects of Catch-Up Retirement Contributions on Non-Retirement Saving (May 12, 2020). Available at SSRN: https://ssrn.com/abstract=3532426 or http://dx.doi.org/10.2139/ssrn.3532426

Lucas Goodman (Contact Author)

U.S. Department of the Treasury ( email )

1500 Pennsylvania Avenue
Washington, DC 20220
United States

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