“Default Options and Retirement Saving Dynamics”. Revise and resubmit, American Economic Review. [This version: June 2021]
I document that employees offset the short-run positive effect of auto-enrollment in retirement plans by saving less in the future. Consequently, a structurally estimated lifecycle model predicts that the long-term effect of auto-enrollment on wealth is negligible except at the bottom of the earnings distribution. The observed inertia at the savings default is explained by an optout cost of around $250. My estimate is smaller than the thousands of dollars estimated in previous studies because non-autoenrolled workers can compensate for not contributing now by contributing more later. Auto-enrollment improves welfare if the policymaker is paternalistic or has strong redistributive preferences.
“Efficiency in Household Decision Making: Evidence from the Retirement Savings of US Couples”, with Lucas Goodman (US Treasury) and Cormac O’Dea (Yale). Draft available.
Pareto efficiency is a core assumption of most models of the household. We test this assumption using a new dataset covering the retirement saving contributions of 1.3 million U.S. couples. While a vast literature has failed to reject household efficiency in developed countries, we find evidence of widespread inefficiency in our setting: retirement contributions are not allocated to the account of the spouse with the highest employer match rate. This lack of coordination cannot be explained by inertia, auto-enrollment, or simple heuristics. Instead, we find that indicators of weaker marital commitment correlate with the incidence of inefficient allocations.
“The One Child Policy and Household Saving” with Nicolas Coeurdacier (SciencesPo) & Keyu Jin (LSE).
Revise and resubmit, Journal of the European Economics Association. [This version: December 2019]
We investigate whether the ‘one-child policy’ has contributed to the rise in China’s household saving rate and human capital in recent decades. In a life-cycle model with intergenerational transfers and human capital accumulation, fertility restrictions lower expected old-age support coming from children—inducing parents to raise saving and education investment in their offspring. Quantitatively, the policy can account for at least 30% of the rise in aggregate saving. Using the birth of twins under the policy as an empirical out-of-sample check to the theory, we find that quantitative estimates on saving and education decisions line up well with micro-data.
“The Evolution of U.S. Firms’ Retirement Plan Offerings: Evidence from a New Panel Data Set” with Antoine Arnoud (IMF), Jorge Colmenares (MIT), Cormac O’Dea (Yale) and Aneesha Parvathaneni (Yale). [April 2021]
Work in progress
“How Do Consumers Finance Increased Retirement Savings?” with Christopher Palmer (MIT)
“Preferences or Frictions? Identifying the Determinants of Limited Stock Market Participation” with Tim de Silva (MIT)