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Home Publications What can we learn about automatic enrollment into pensions from small employers?

What can we learn about automatic enrollment into pensions from small employers?

Journal article

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.

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Press release
Lots of research has demonstrated how people with higher-earning parents tend to have higher earnings. New IFS research, funded by the Economic and Social Research Council and published today, shows that having wealthy parents is even more important when it comes to determining the wealth of ...
IFS Working Paper W21/26
MPCs were directly elicited from a representative sample of UK adults in July 2020 using receipt of a hypothetical unanticipated, one-time income payment. Reported MPCs are modest, around 11% on average.