NB21-11: Individual-level v. Household-level Responses to Incentives in U.S. Retirement Savings Plans

One of the mechanisms used by employers to promote retirement saving is through matching contributions. While considerable past research has documented the effects of employer matching provisions on individual contributions to retirement plans, much less is known about their effect on spousal savings, or on aggregate household saving. This project uses a panel data set of employer retirement plans linked to U.S. administrative tax data to investigate the household-level responses to retirement incentives faced by individuals. Among the questions we will explore is whether increased saving by one spouse crowds-out saving by the other; and whether couples always allocate their household saving to the plan with the most generous matching formula.