
Why Employers Make Bad Choice Architects
Federal retirement policy has long been premised on the view that many of us, if left to our own devices, will save too little for retirement. A growing literature in behavioral economics has shown that seemingly small nudges in employer retirement plan design, like automatically enrolling workers into contributing to the plan, can have large effects on behavior. Many have seized on these findings to advocate that employers design the “choice architecture” of their 401(k) plans in order to improve their workers’ choices.
Indeed, this approach is widely heralded as the most successful application of behavioral economics to public policy … Read more