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Peter R. Orszag

How to Encourage Workers to Save More for Retirement

Research shows that when employers match 401(k) plan contributions, more people participate. Automatic enrollment helps, too.

It doesn’t take a law.

It doesn’t take a law.

Photographer: Drew Angerer/Getty Images

For U.S. workers covered by 401(k) plans, every January offers a new opportunity to change how much they save for retirement. So this is a good time for policymakers to put some thought into the best ways to encourage retirement savings as the U.S. continues to move away from traditional defined-benefit pensions.

New evidence presented this month at the annual Allied Social Science Association meeting highlights effective ways to induce workers to save. It includes support for the findings of a research  team I was part of 15 years ago that examined the impact on savings behavior when a retirement contribution was matched. That research team included Esther Duflo, who has since gone on to win the Nobel Prize in Economic Science for her work on randomized control trials, the gold standard of research methodology on which our original research was based.