Article | Journal of Economic Behavior & Organization | November 2013

Simplification and Saving

by John Beshears, James J. Choi, David Laibson and Brigitte C. Madrian


The daunting complexity of important financial decisions can lead to procrastination. We evaluate a low-cost intervention that substantially simplifies the retirement savings plan participation decision. Individuals received an opportunity to enroll in a retirement savings plan at a pre-selected contribution rate and asset allocation, allowing them to collapse a multidimensional problem into a binary choice between the status quo and the pre-selected alternative. The intervention increases plan enrollment rates by 10 to 20 percentage points. We find that a similar intervention can be used to increase contribution rates among employees who are already participating in a savings plan.

Keywords: retirement savings; Simplification; procrastination; Behavioral economics; Saving; Motivation and Incentives; Retirement;


Beshears, John, James J. Choi, David Laibson, and Brigitte C. Madrian. "Simplification and Saving." Special Issue on Behavioral Consumer Finance. Journal of Economic Behavior & Organization 95 (November 2013): 130–145.