Using data from over 100 U.S. retirement plans and a representative U.K. panel, I document the impact of auto-enrollment on retirement savings at different horizons. I replicate the impact of auto-enrollment on participation and contributions in the short–run (at 12 months), but I show that these gains are attenuated over the medium-run (at 36 months). At this longer horizon, the average savings increases are modest, though auto-enrollment significantly lowers inequality in savings. To assess auto-enrollment’s lifetime impact, I estimate a lifecycle consumption-savings model that can fit the observed patterns with a switching cost of approximately $250, smaller than previous estimates.

We study the role of risk preferences and frictions in portfolio choice using variation in 401(k) default investment options. Patterns of active choice in response to different default funds imply that, absent participation frictions, 94% of investors prefer holding stocks, with an equity share of retirement wealth declining with age—patterns markedly different from their observed allocations. We use this quasi-experiment to estimate a lifecycle model and find relative risk aversion of 2, EIS of 0.4, and a $200 portfolio adjustment cost. Our results suggest low stock-market participation is due to participation frictions rather than non-standard preferences such as loss-aversion.

Pareto efficiency is a core assumption of most models of the household. We test this assumption using a new dataset covering the retirement saving contributions of 1.3 million U.S. couples. While a vast literature has failed to reject household efficiency in developed countries, we find evidence of widespread inefficiency in our setting: retirement contributions are not allocated to the account of the spouse with the highest employer match rate. This lack of coordination cannot be explained by inertia, auto-enrollment, or simple heuristics. Instead, we find that indicators of weaker marital commitment correlate with the incidence of inefficient allocations.

U.S. employers and the federal government devote more than 1.5% of GDP annually to promote retirement saving. We study the distributional and lifetime impact of these savings incentives across racial groups using a new employer-employee linked data set covering millions of Americans. The average contribution rate of Black and Hispanic workers is roughly 40% lower than that of White workers. The rich and the children of the rich save more; racial differences in own and parental incomes account for a large share of the racial contribution gaps. Tax and employer matching subsidies further amplify these saving disparities by channeling more resources to those who save more. We estimate that breaking the link between contribution choices and saving subsidies, through revenue-neutral reforms, would significantly reduce racial disparities and intergenerational persistence in wealth accumulation.

Higher retirement savings might not translate into net wealth accumulation if, rather than cutting spending, individuals reduce their non-retirement savings and take on more debt. We use newly merged deposit-, credit-, and pension-account data from a large UK financial institution to examine a policy that gradually increased retirement contributions from 2% to 8% of salary between March 2018 and April 2019. For every £1 reduction in take-home pay due to higher employee contributions, employees cut their spending by only £0.34 (especially in the restaurant and leisure categories) and financed the remaining with lower deposit balances and higher credit card debt. Those with lower initial deposit balances cut their spending the most, while those with significant liquid savings draw down their deposits. Since employees cannot draw down their balances indefinitely, we use a lifecycle model–calibrated to match the observed short-term responses–to predict that long-run spending responses are larger but feature similar heterogeneity. A social planner concerned about undersaving for retirement due to heterogeneous present bias should, therefore, avoid targeting retirement interventions at high-liquidity individuals who are both less likely to cut their spending and less likely to be present-biased.

We investigate whether the ‘one-child policy’ has contributed to the rise in China’s household saving rate and human capital in recent decades. In a life-cycle model with intergenerational transfers and human capital accumulation, fertility restrictions lower expected old-age support coming from children—inducing parents to raise saving and education investment in their offspring. Quantitatively, the policy can account for at least 30% of the rise in aggregate saving. Using the birth of twins under the policy as an empirical out-of-sample check to the theory, we find that quantitative estimates on saving and education decisions line up well with micro-data.