Who Takes Advantage of Tax-Deferred Savings Programs? Evidence From Federal Income Tax Data

National Tax Journal, 54:3, pp.669-688, 2001

20 Pages Posted: 24 Mar 2020

See all articles by David P. Richardson

David P. Richardson

TIAA Institute

David Joulfaian

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

Date Written: September 15, 2001

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: Retirement, Income Tax

JEL Classification: H2, D14, D91

Suggested Citation

Richardson, David P. and Joulfaian, David, Who Takes Advantage of Tax-Deferred Savings Programs? Evidence From Federal Income Tax Data (September 15, 2001). National Tax Journal, 54:3, pp.669-688, 2001, Available at SSRN: https://ssrn.com/abstract=3545351

David P. Richardson (Contact Author)

TIAA Institute ( email )

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David Joulfaian

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

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Georgetown University - Department of Economics ( email )

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