TY - JOUR
T1 - Federal tax policy, employer matching, and 401(k) saving
T2 - Evidence from HRS W-2 records
AU - Cunningham, Christopher R.
AU - Engelhardt, Gary V.
PY - 2002/9
Y1 - 2002/9
N2 - We use panel data from W-2 records for households in the Health and Retirement Study (HRS) to examine the responsiveness of 401(k) saving to taxation, employer matching, and lifecycle factors. The limit on the tax deductibility of IRA contributions enacted in the Tax Reform Act of 1986 appears to have raised 401(k) saving by 6 percent. Individuals eligible for employer matching contribute substantially more, but this result is not robust once job and firm characteristics are taken into account. Alternative pension coverage greatly reduces 401(k) saving, whereas the ability to direct the investment of funds is associated with higher saving.
AB - We use panel data from W-2 records for households in the Health and Retirement Study (HRS) to examine the responsiveness of 401(k) saving to taxation, employer matching, and lifecycle factors. The limit on the tax deductibility of IRA contributions enacted in the Tax Reform Act of 1986 appears to have raised 401(k) saving by 6 percent. Individuals eligible for employer matching contribute substantially more, but this result is not robust once job and firm characteristics are taken into account. Alternative pension coverage greatly reduces 401(k) saving, whereas the ability to direct the investment of funds is associated with higher saving.
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U2 - 10.17310/ntj.2002.3.12
DO - 10.17310/ntj.2002.3.12
M3 - Article
AN - SCOPUS:0038893709
SN - 0028-0283
VL - 55
SP - 617
EP - 645
JO - National Tax Journal
JF - National Tax Journal
IS - 3
ER -