Tax-Preferred Savings Vehicles: Can Financial Education Improve Asset Location Decisions?

M. Martin Boyer; Philippe d’Astous; Pierre-Carl Michaud

doi:10.1162/rest_a_00973

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Tax-Preferred Savings Vehicles: Can Financial Education Improve Asset Location Decisions?

M. Martin Boyer¹; Philippe d’Astous²; Pierre-Carl Michaud³

¹ HEC Montréal and CIRANO · ² HEC Montréal · ³ HEC Montréal, CIRANO, and NBER

The Review of Economics and Statistics 2022

In this study, we conduct a stated-choice experiment to analyze the decision to contribute to either a front- or back-loaded tax-preferred retirement savings account. Our experimental design includes a randomized financial education intervention that provides information on the tax implications of both types of account. Respondents who were exposed to the intervention have greater knowledge of these accounts and make contribution choices that increase their after-tax income. Using a well-defined benchmark, we show that on average, respondents who experienced the intervention increase their discounted welfare by about 4% of their contribution amount.

DOI: 10.1162/rest_a_00973
Volume: 104 (3)
Pages: 541-556
Language: en
Export: BibTeX
Sources: openalex crossref