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Bridging the gap in pension participation: how much can universal tax-deferred pension coverage hope to achieve?

Published online by Cambridge University Press:  20 February 2014

NADIA S. KARAMCHEVA  and
GEOFFREY SANZENBACHER
NADIA S. KARAMCHEVA
Affiliation:
The Urban Institute (e-mail: nkaramcheva@urban.org)
GEOFFREY SANZENBACHER
Affiliation:
Analysis Group and The Center for Retirement Research at Boston College (e-mail: sanzenba@bc.edu)
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Abstract

In light of the declining pension coverage of low-income workers, policy makers have discussed requiring all employers to offer individual retirement accounts, similar to defined contribution plans. How likely to participate are workers who currently do not have access to a pension plan? We address this question by using plausibly exogenous variation in pension-plan availability to estimate the determinants of participation in a standard selection on unobservables model. We find that currently uncovered low-income workers are fairly likely to participate in a newly offered plan, yet they are much less likely to do so than currently covered workers.

Keywords

J08J26J32private pensionsparticipationself-selectionuniversal coverage
Type
Articles
Information
Journal of Pension Economics & Finance , Volume 13 , Issue 4 , October 2014 , pp. 439 - 459
Copyright
Copyright © Cambridge University Press 2014 

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