Holmes Berk, Sarah
[Verfasser:in];
Choi, James J.
[Verfasser:in];
Garg, Jay
[Verfasser:in];
Beshears, John
[Verfasser:in];
Laibson, David I.
[Verfasser:in]
;
National Bureau of Economic Research
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Beschreibung:
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 short-term 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