Digitalization and Retirement Contribution Behavior: Evidence from Administrative Data

Abstract

Although digitalization promises to help individuals plan adequately for their retirement, no evidence has been provided yet on its actual impacts. Using Swiss administrative pension fund data, we document limited take-up of financial incentives for retirement contributions. Exploiting the staggered roll-out of a digital pension application across occupational pension funds over time, we show its introduction has large effects on tax-favored retirement contributions. We then leverage a field experiment to show that using the digital pension app affects retirement contribution behavior mainly through reducing the "hassle" costs of making contributions, rather than providing information on associated tax savings.

Keywords: Digitalization, Pension app, Occupational pensions, Financial incentives, Retirement contributions

JEL Classification: C93, D14, D83, G51