Different defaults affect different groups differently
de Bresser,Jochem Knoef,Marike
de Bresser,Jochem
Knoef,Marike
Abstract
We analyze heterogeneity in default effects on retirement saving in a randomized survey experiment. In the Dutch context of universal, mandatory, and high pensions, respondents make realistic choices in which they can maintain the status-quo, suspend, or double pension contributions for one, three, or five years. The aggregate effect sizes of defaults at a threeyear suspension and doubling of contributions are similar, increasing the fraction choosing these options by 22%-points. The former most strongly affects those with low incomes and high pension entitlements, while the latter affects patient, non-procrastinating, and especially impulsive individuals. Average savings are influenced in different directions, depending on the alternatives that individuals would have chosen in absence of the default. When setting defaults, it is important to consider variation in counterfactuals.
Description
Date
2025-03
Journal Title
Journal ISSN
Volume Title
Publisher
Research Projects
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Journal Issue
Keywords
Decision making, Defaults, Heterogeneous effects, Retirement saving, D14 - Household Saving; Personal Finance, D31 - Personal Income, Wealth, and Their Distributions, D91 - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making, J14 - Economics of the Elderly ; Economics of Disability; Non-Labor Market Discrimination†, SDG 8 - Decent Work and Economic Growth
Citation
de Bresser, J & Knoef, M 2025, 'Different defaults affect different groups differently', Journal of Economic Behavior & Organization, vol. 231, 106876. https://doi.org/10.1016/j.jebo.2024.106876