Two huge themes that emerge from behavioural economics are (i) people are ruled by inertia so policies should try to make the "good" choice the path of least resistance and (ii) complexity is a huge factor in determining whether people will do something. The literature on pensions is now overwhelmingly in favour of simplifying pensions as a way of promoting participation. We have been talking about this in here for lots of different things. Below is a recent Kennedy School Working paper proposing a simplification of the student financial aid system. This is something we absolutely should look at in Ireland and, at the very least, examine whether students are being dettered by not getting clear signals as to whether they are eligible or not.
http://ksgnotes1.harvard.edu/research/wpaper.NSF/rwp/RWP07-014
1 comment:
Nice find Liam!
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