Vincenzo Andrietti (Carlos III Madrid e Università di Pescara)

“Auto-enrollment, Matching andParticipation in 401(k) Plans”

Abstract

This study uses plan-level data from Form 5500s filed by plan sponsors annuallywith the Internal Revenue Service to analyze the effects of automatic enrollment andemployer matching on 401(k) plan participation rates, and the effect of automaticenrollment on employer matching rates. The potential endogeneity of employerauto-enrollment/matching decisions is addressed exploiting the panel structure ofthe data. The results indicate that while both auto-enrollment and matching rateshave a positive effect on plan participation rates, the effect of auto-enrollment issubstantially higher. Moreover, auto-enrollment is found to have a positive andsignificant effect on match rates.