Found 4 article(s) for author 'John BeShears'

Building Emergency Savings Through Employer-Sponsored Rainy Day Savings Accounts

Building Emergency Savings Through Employer-Sponsored Rainy Day Savings Accounts. John Beshears, David Laibson, October 2017, Paper, “Many Americans live paycheck to paycheck, carry revolving credit balances, and have little liquidity to absorb financial shocks (Angeletos et al. 2001; Kaplan and Violante 2014). One consequence of this financial vulnerability is that many individuals use a portion of their retirement savings during their working years. For every $1 that flows into 401(k)s and similar accounts, between 30¢ and 40¢ leaks out before retirement (Argento, Bryant, and Sabelhaus 2015). We explore the practical considerations and challenges of helping households accumulate liquid savings that can be deployed when urgent pre-retirement needs arise. We believe that this can be achieved cost effectively by automatically enrolling workers into an employer-sponsored payroll deduction “rainy day” or “emergency” savings account, and present three specific implementation options.Link

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Should Governments Invest More in Nudging?

Should Governments Invest More in Nudging? John Beshears, Cass Sunstein, August 2017, Paper, “Governments are increasingly adopting behavioral science techniques for changing individual behavior in pursuit of policy objectives. The types of “nudge” interventions that governments are now adopting alter people’s decisions without coercion or significant changes to economic incentives. We calculated ratios of impact to cost for nudge interventions and for traditional policy tools, such as tax incentives and other financial inducements, and we found that nudge interventions often compare favorably with traditional interventions. We conclude that nudging is a valuable approach that should be used more often in conjunction with traditional policies, but more calculations are needed to determine the relative effectiveness of nudging.Link

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Self Control and Commitment: Can Decreasing the Liquidity of a Savings Account Increase Deposits?

Self Control and Commitment: Can Decreasing the Liquidity of a Savings Account Increase Deposits? John Beshears, David Laibson, and Brigitte Madrian, August 2015, Paper. “If individuals have self-control problems, they may take up commitment contracts that restrict their spending. We experimentally investigate how contract design affects the demand for commitment contracts. Each participant divides money between a liquid account, which permits unrestricted withdrawals, and a commitment account with withdrawal restrictions that are randomized across participants. When the two accounts pay the same interest rate...” Link

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The Effect of Providing Peer Information on Retirement Savings Decisions

The Effect of Providing Peer Information on Retirement Savings Decisions. John BeShears, David Laibson, Brigitte C. Madrian, November 14, 2013, Paper. “Information about peer behavior can influence a person’s choices. We conducted a field experiment in a 401(k) plan to measure the effect of peer information on savings choices. Low-saving employees were sent a simplified plan enrollment or contribution increase form. A randomized subset of forms included information about the fraction of age-matched…” Link

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