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Small employers employ significant fractions of the workforce, but their employees typically have very low pension plan participation rates and so are much more likely to be affected by government polices requiring automatic enrollment. We examine the first nationwide policy in the United Kingdom obliging small employers to enroll employees automatically into a pension. Exploiting pseudorandom variation in its introduction, we find automatic enrollment increased pension participation by 44 percentage points, reaching 70 percent — still substantially lower than the 90 percent rate among those working for the largest employers. We discuss evidence for the potential mechanisms that drive this lower participation rate.
Authors
Deputy Director
Carl, a Deputy Director, is an editor of the IFS Green Budget, is expert on the UK pension system and sits on the Social Security Advisory Committee.
Associate Director
Jonathan is an Associate Director and Head of Retirement, Savings and Ageing sector, focusing on pensions, savings and later-life economic activity.
Journal article details
- DOI
- 10.1086/714113
- Publisher
- University of Chicago Press
- JEL
- D14J32J38
- Issue
- Volume 2, Issue 74, May 2021
Suggested citation
Cribb, J and Emmerson, C. (2021). 'What can we learn about automatic enrollment into pensions from small employers?' 2(74/2021)
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