Finance Papers

Document Type

Journal Article

Date of this Version

6-2015

Publication Source

The Journal of Finance

Volume

70

Issue

3

Start Page

1161

Last Page

1201

DOI

10.1111/jofi.12258

Abstract

Using a field experiment in a 401(k) plan, we measure the effect of disseminating information about peer behavior on savings. Low-saving employees received simplified plan enrollment or contribution increase forms. A randomized subset of forms stated the fraction of age-matched coworkers participating in the plan or age-matched participants contributing at least 6% of pay to the plan. We document an oppositional reaction: the presence of peer information decreased the savings of nonparticipants who were ineligible for 401(k) automatic enrollment, and higher observed peer savings rates also decreased savings. Discouragement from upward social comparisons seems to drive this reaction.

Copyright/Permission Statement

This is the peer reviewed version of the following article: BESHEARS, J., CHOI, J. J., LAIBSON, D., MADRIAN, B. C. and MILKMAN, K. L. (2015), The Effect of Providing Peer Information on Retirement Savings Decisions. The Journal of Finance, 70: 1161–1201. doi:10.1111/jofi.12258, which has been published in final form at http://dx.doi.org/10.1111/jofi.12258. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving http://olabout.wiley.com/WileyCDA/Section/id-820227.html#terms].

Embargo Date

5-11-2017

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Date Posted: 27 November 2017

This document has been peer reviewed.