How do 401 (k)s Affect Saving? Evidence from Changes in 401 (k) Eligibility

摘要

This paper investigates the effect of 401(k) eligibility on saving. To address the possibility that eligibility correlates across individuals with their unobserved tastes for saving, I examine a change in eligibility: some individuals are initially ineligible for their 401(k) but become eligible when they have worked at their firm long enough. I find that eligibility raises 401 (k) balances. Other financial assets and net worth respond insignificantly to eligibility, but the confidence intervals do not rule out substantial responses. In response to eligibility, IRA assets increase, consistent with a "crowd-in " hypothesis, and accumulation of cars decreases.