Information, Preferences, and Public Benefit Participation: Experimental Evidence from the Advance EITC and 401(k) Savings
Jones, Damon. 2010. "Information, Preferences, and Public Benefit Participation: Experimental Evidence from the Advance EITC and 401(k) Savings."
American Economic Journal: Applied Economics,
Within a field experiment, I present a treatment group with reductions
in information, administrative, stigma, and procrastination
costs associated with the Advance EITC. The treatment increases
Advance participation from 0.3 to 1.2 percent. Another treatment
simultaneously encourages 401(k) savings, increasing 401(k) participation
from 46 to 50 percent. However, there is no additional
increase in Advance participation when coupled with the 401(k)
treatment, casting doubt on a long-term forced savings motive. The
results indicate that EITC recipients actively forgo the Advance.
Further work is needed to identify what underlies these preferences.
Possible explanations include uncertainty and/or short-term forced
savings motives. (JEL D14, D82, H23, H24, H31)
Article Full-Text Access
Jones, Damon (Stanford Institute for Economic Policy Research, Stanford U and U Chicago)
D14: Personal Finance
D82: Asymmetric and Private Information
H23: Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
H24: Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
H31: Fiscal Policies and Behavior of Economic Agents: Household
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