Nudging Life Insurance Holdings in the Workplace

31 Pages Posted: 14 May 2020

See all articles by Timothy F. Harris

Timothy F. Harris

Illinois State University - Department of Economics

Aaron Yelowitz

University of Kentucky - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: April 2017

Abstract

Using data from a university, we analyze a policy designed to increase employer‐sponsored life insurance. The university increased basic life insurance holdings, which nudged employees with supplemental coverage to have more life insurance. In large part due to inertia, the nudge increased life insurance holdings one‐for‐one for those who could have undone it. Additionally, we find that expanding coverage options significantly increased total life insurance holdings for new hires who were not subject to inertia. These policy changes reduced uninsured vulnerabilities for two‐thirds of employees. Our findings have important policy implications for addressing widespread disparities in life insurance coverage.

JEL Classification: D31, G22, D03, J32, J33, J38, H20

Suggested Citation

Harris, Timothy F. and Yelowitz, Aaron, Nudging Life Insurance Holdings in the Workplace (April 2017). Economic Inquiry, Vol. 55, Issue 2, pp. 951-981, 2017, Available at SSRN: https://ssrn.com/abstract=3596348 or http://dx.doi.org/10.1111/ecin.12390

Timothy F. Harris (Contact Author)

Illinois State University - Department of Economics ( email )

Normal, IL 61790-4200
United States

HOME PAGE: http://www.timothyfharris.com

Aaron Yelowitz

University of Kentucky - Department of Economics ( email )

Lexington, KY 40506
United States

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