Journal of Economic Perspectives: Vol. 10 No. 4 (Fall 1996)


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Assessing the Effectiveness of Saving Incentives

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Hubbard, R. Glenn, and Jonathan S. Skinner. 1996. "Assessing the Effectiveness of Saving Incentives." Journal of Economic Perspectives, 10(4): 73-90.

DOI: 10.1257/jep.10.4.73


The authors argue that there is more to be learned from recent research on the effectiveness of targeted saving incentives than the wide variation in empirical estimates suggests. They conclude that characterizations of 'all new saving' or 'no new saving' are extreme IRAs and 401(k) plans appear to stimulate moderate amounts of new saving. The authors suggest a cost-benefit approach to ask: What is the incremental gain in capital accumulation per dollar of foregone revenue? For quite conservative measures of the saving impacts of IRAs or 401(k)s, the incremental gains in capital accumulation per dollar of lost revenue are large.

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Hubbard, R. Glenn (Columbia U and NBER)
Skinner, Jonathan S. (Dartmouth College and NBER)

JEL Classifications

H31: Fiscal Policies and Behavior of Economic Agents: Household
J26: Retirement; Retirement Policies
D12: Consumer Economics: Empirical Analysis


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