The Power of Suggestion: Inertia in 401(k) Participation and Savings Behavior

摘要: This paper analyzes the impact of automatic enrollment on 401(k) savings behavior. We have two key e ndings. First, participation is signie cantly higher under enrollment. Second, a substantial fraction participants hired retain both default contribution rate and fund allocation even though few employees before picked this particular outcome. “ default” behavior appears to result from participant inertia employee perceptions as investment advice. These ndings implications for design plans well any type Social Security reform that includes personal accounts over which individuals control. They also shed light more generally importance economic noneconomic (behavioral) factors in determination individual