Panel Paper: Small Cues Change Savings Choices

Friday, November 9, 2012 : 9:45 AM
Jefferson (Sheraton Baltimore City Center Hotel)

*Names in bold indicate Presenter

James Choi1, Emily Haisley2, Jennifer Kurkoski3 and Cade Massey1, (1)Yale University, (2)Barclays Bank, (3)Google Inc.

In randomized field experiments, we embedded one- to two-sentence anchoring, goal setting, or savings threshold cues in emails to employees about their 401(k) savings plan. We find that anchors increase or decrease 401(k) contribution rates by up to 1.4% of income. A high savings goal example raises contribution rates by up to 2.2% of income. Highlighting a higher savings threshold in the match incentive structure raises contributions by up to 1.5% of income relative to highlighting the lower threshold. Highlighting the maximum possible contribution rate raises contribution rates by up to 2.9% of income among low savers.

Full Paper: