Year: 2024
Type: report
Study design: Clinical Trial
Abstract: Automatic enrollment is often used to increase retirement savings.What are the effects of using it (or, alternatively, requiring an active enrollment choice) to increase short-term savings?We evaluate two experiments in the U.K. at employers that enable workers to set up payroll contributions to fund short-term savings accounts.In the first experiment (N = 7,404), employees at two firms were randomly assigned opt-in, opt-out, or active choice enrollment into the shortterm savings program.Nine months later, participation was 48 percentage points higher under automatic enrollment than opt-in enrollment, and average balances were £114 higher.In the second experiment (N = 3,605), after years of offering opt-in payroll contributions to fund a short-term savings account, the employer changed to opt-out enrollment for new hires only.In tenure month 18, participation in the short-term savings program was 48 percentage points higher under automatic enrollment, and average balances were £193 higher.
DOI: 10.3386/w32581
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W4399725798