How Do Behavioral Approaches to Increase Savings Compare? Evidence from Multiple Interventions in the U.S. Army

How can we compare approaches to increase retirement savings? Messaging interventions, active choice frameworks, and automatic enrollment all increase retirement savings, but evidence supporting these approaches spans widely different institutional settings, populations, and time periods. In this study, we use experimental and quasi-experimental variation in these approaches within a constant setting using interventions in the U.S. military during 2016–2018. We find large differences in the efficacy of these approaches, with active choice and automatic enrollment programs being about 10 and 100 times more effective than messaging interventions, respectively. We also collect novel data on program costs and generate estimates of cost-effectiveness for each program. We find that active choice and automatic enrollment are consistently more cost effective than any messaging interventions, active choice programs are the most cost-effective for small firms, and automatic enrollment is the most cost-effective program for larger firms.

This paper was accepted by Jack Soll, behavioral economics and decision analysis.

Funding: The authors thank the TIAA Institute, Wharton School’s Pension Research Council and Boettner Center, the Social Security Administration, and the NBER Retirement and Disability Research Center for financial support. The research reported herein was performed pursuant to a grant from the U.S. Social Security Administration [SSA Grant Number RDR18000003] funded as part of the Retirement and Disability Research Consortium. The opinions and conclusions expressed are solely those of the author(s) and do not represent the opinions or policy of the Social Security Administration, any agency of the Federal Government, the NBER, the TIAA Institute, or Wharton School’s Pension Research Council/Boettner Center. Neither the U.S. Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of the contents of this research. Reference herein to any specific commercial product, process or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply endorsement, recommendation or favoring by the U.S. Government or any agency thereof.

Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2024.04939.