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Small Cues Change Savings Choices

Author

Listed:
  • James J. Choi
  • Emily Haisley
  • Jennifer Kurkoski
  • Cade Massey
Abstract
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 1.9% 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.

Suggested Citation

  • James J. Choi & Emily Haisley & Jennifer Kurkoski & Cade Massey, 2012. "Small Cues Change Savings Choices," NBER Working Papers 17843, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:17843
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles

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