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  5. When Nudges Are Forever: Inertia in the Swedish Premium Pension Plan

AEA Papers and Proceedings

ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)

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When Nudges Are Forever: Inertia in the Swedish Premium Pension Plan

  • Henrik Cronqvist
  • Richard H. Thaler
  • Frank Yu
AEA Papers and Proceedings
vol. 108, May 2018
(pp. 153–58)
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Abstract

To inform economists and policymakers about whether the effects of nudges are persistent in one specific context, we study the choice architecture of the Swedish Premium Pension Plan. The data we study consist of all initial choices and subsequent rebalancing activities by the entire population of 7.3 million retirement savers in Sweden during the period 2000 to 2016. Based on our analysis of these data, we conclude that the effects of nudging in this case were surprisingly persistent and seem to last nearly two decades, if not forever.

Citation

Cronqvist, Henrik, Richard H. Thaler, and Frank Yu. 2018. "When Nudges Are Forever: Inertia in the Swedish Premium Pension Plan." AEA Papers and Proceedings, 108: 153–58. DOI: 10.1257/pandp.20181096

Additional Materials

JEL Classification

  • D14 Household Saving; Personal Finance
  • D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
  • H55 Social Security and Public Pensions
  • J26 Retirement; Retirement Policies
  • J32 Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions