CHOICE ARCHITECTURE AND RETIREMENT SAVINGS: A RANDOMIZED FIELD EXPERIMENT ON DEFAULT ENROLLMENT AND CONTRIBUTION-RATE FRAMING
Keywords:
behavioral economics; default effects; choice architecture; nudge; retirement savings; status-quo bias,,Abstract
This paper examines whether switching employees from an opt-in to an opt-out (automatic)
enrollment default increases participation and initial contribution rates in a defined-contribution
retirement savings plan. Using a randomized field-experiment design (N = 433) conducted across
a mid-sized service-sector employer, participants were assigned to a standard opt-in enrollment
process (control) or an opt-out default enrollment process paired with a simplified contribution
rate framing (nudge). Enrollment at 30 and 90 days, initial contribution rates, and 90-day opt-out
rates were compared between groups. Consistent with prior behavioral-economics findings on
default effects and choice architecture, the nudge condition produced substantially higher
enrollment at 30 days (78.5% vs. 41.6%, difference = 36.9 percentage points, 95% CI [29.8, 44.0])
and higher mean initial contribution rates (6.0% vs. 4.2%). A multivariate logistic regression
confirms the nudge effect after adjusting for age, income, and prior plan participation (OR = 5.05,
p < .001). Opt-out rates within 90 days did not differ significantly between groups. These findings
replicate the core default-effect literature in a new sample and setting and are discussed in relation
to status-quo bias, present bias, and the ethics of default-based nudging.
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