Wealth Accumulation: The Role of Others
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peer effects
retirement saving
wealth inequality
cognitive load
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This chapter reviews evidence from several recent projects exploring how neighbors, peers, financial advisors, and exogenous stressors affect wealth accumulation. Having neighbors with college economics or business education promotes retirement saving. Greater local wealth inequality and mobility at the start of economic life motivate college graduates to take portfolio risks and achieve greater wealth, leaving others behind. Financial advice from unbiased professionals differs from peer advice in how it relates to advisor and advisee characteristics. Background stressors, such as crises, wars, and personal problems, occupy savers’ minds. In an incentivized online experiment, background cognitive load consistently dampened consumption and promoted saving.