TITLE

Federal Tax Policy, Employer Matching, and 401(k) Saving: Evidence from HRS W-2 Records

AUTHOR(S)
Cunningham, Christopher R.; Engelhardt, Gary V.
PUB. DATE
September 2002
SOURCE
National Tax Journal;Sep2002, Vol. 55 Issue 3, p617
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
Abstract - We use panel data from W-2 records for households in the Health and Retirement Study (HRS) to examine the responsiveness of 401(k) saving to taxation, employer matching, and lifecycle factors. The limit on the tax deductibility of IRA contributions enacted in the Tax Reform Act of 1986 appears to have raised 401(k) saving by 6 percent. Individuals eligible for employer matching contribute substantially more, but this result is not robust once job and firm characteristics are taken into account. Alternative pension coverage greatly reduces 401(k) saving, whereas the ability to direct the investment of funds is associated with higher saving.
ACCESSION #
8690055

 

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