Do Employer Pension Contributions Reflect Employee Preferences? Evidence from a Retirement Savings Reform in Denmark

Research output: Contribution to journal › Journal article › Research › peer-review

Standard

Do Employer Pension Contributions Reflect Employee Preferences? Evidence from a Retirement Savings Reform in Denmark. / Fadlon, Itzik; Laird, Jessica; Nielsen, Torben Heien.

In: American Economic Journal: Applied Economics, Vol. 8, No. 3, 07.2016, p. 196-216.

Research output: Contribution to journal › Journal article › Research › peer-review

Harvard

Fadlon, I, Laird, J & Nielsen, TH 2016, 'Do Employer Pension Contributions Reflect Employee Preferences? Evidence from a Retirement Savings Reform in Denmark', American Economic Journal: Applied Economics, vol. 8, no. 3, pp. 196-216. https://doi.org/10.1257/app.20150015

APA

Fadlon, I., Laird, J., & Nielsen, T. H. (2016). Do Employer Pension Contributions Reflect Employee Preferences? Evidence from a Retirement Savings Reform in Denmark. American Economic Journal: Applied Economics, 8(3), 196-216. https://doi.org/10.1257/app.20150015

Vancouver

Fadlon I, Laird J, Nielsen TH. Do Employer Pension Contributions Reflect Employee Preferences? Evidence from a Retirement Savings Reform in Denmark. American Economic Journal: Applied Economics. 2016 Jul;8(3):196-216. https://doi.org/10.1257/app.20150015

Author

Fadlon, Itzik ; Laird, Jessica ; Nielsen, Torben Heien. / Do Employer Pension Contributions Reflect Employee Preferences? Evidence from a Retirement Savings Reform in Denmark. In: American Economic Journal: Applied Economics. 2016 ; Vol. 8, No. 3. pp. 196-216.

Bibtex

@article{f582f38473c64472aa484e69697367e1,
title = "Do Employer Pension Contributions Reflect Employee Preferences? Evidence from a Retirement Savings Reform in Denmark",
abstract = "This paper studies how firms set contributions to employer provided 401(k)-type pension plans. Using a reform that decreased the subsidy to contributions to capital pension accounts for Danish workers in the top income tax bracket, we provide strong evidence that employers' contributions are based on their employees' savings preferences. We find an immediate decrease in employer contributions to capital accounts, whose magnitude increased in the share of employees directly affected by the reform. This response was large relative to average employee responses within private IRA-type plans and was accompanied by a similar magnitude shift of employer contributions to annuity accounts.",
keywords = "Faculty of Social Sciences, D14, J26, J32",
author = "Itzik Fadlon and Jessica Laird and Nielsen, {Torben Heien}",
note = "JEL D14, J26, J32",
year = "2016",
month = jul,
doi = "10.1257/app.20150015",
language = "English",
volume = "8",
pages = "196--216",
journal = "American Economic Journal: Applied Economics",
issn = "1945-7782",
publisher = "American Economic Association",
number = "3",

}

RIS

TY - JOUR

T1 - Do Employer Pension Contributions Reflect Employee Preferences? Evidence from a Retirement Savings Reform in Denmark

AU - Fadlon, Itzik

AU - Laird, Jessica

AU - Nielsen, Torben Heien

N1 - JEL D14, J26, J32

PY - 2016/7

Y1 - 2016/7

N2 - This paper studies how firms set contributions to employer provided 401(k)-type pension plans. Using a reform that decreased the subsidy to contributions to capital pension accounts for Danish workers in the top income tax bracket, we provide strong evidence that employers' contributions are based on their employees' savings preferences. We find an immediate decrease in employer contributions to capital accounts, whose magnitude increased in the share of employees directly affected by the reform. This response was large relative to average employee responses within private IRA-type plans and was accompanied by a similar magnitude shift of employer contributions to annuity accounts.

AB - This paper studies how firms set contributions to employer provided 401(k)-type pension plans. Using a reform that decreased the subsidy to contributions to capital pension accounts for Danish workers in the top income tax bracket, we provide strong evidence that employers' contributions are based on their employees' savings preferences. We find an immediate decrease in employer contributions to capital accounts, whose magnitude increased in the share of employees directly affected by the reform. This response was large relative to average employee responses within private IRA-type plans and was accompanied by a similar magnitude shift of employer contributions to annuity accounts.

KW - Faculty of Social Sciences

KW - D14

KW - J26

KW - J32

U2 - 10.1257/app.20150015

DO - 10.1257/app.20150015

M3 - Journal article

VL - 8

SP - 196

EP - 216

JO - American Economic Journal: Applied Economics

JF - American Economic Journal: Applied Economics

SN - 1945-7782

IS - 3

ER -

ID: 131546398