Getting to the Top of Mind: How Reminders Increase Saving

New NBER working paper

Getting to the Top of Mind: How Reminders Increase Saving
by Dean Karlan, Margaret McConnell, Sendhil Mullainathan, Jonathan Zinman - #16205 (AG)

Abstract:

We develop and test a simple model of limited attention in
intertemporal choice. The model posits that individuals fully attend
to consumption in all periods but fail to attend to some future lumpy
expenditure opportunities. This asymmetry generates some predictions
that overlap with models of present-bias. Our model also generates
the unique predictions that reminders may increase saving, and that
reminders will be more effective when they increase the salience of a
specific expenditure. We find support for these predictions in three
field experiments that randomly assign reminders to new savings
account holders.

http://papers.nber.org/papers/W16205

Save if you're glad to be gay

There are a small number of papers on economic aspects of sexual orientation, mostly looking at the effects on earnings but there are also papers on patterns of home ownership and the division of labour within the household. A new paper looks at the effects on savings. The results are, perhaps, unsurprising but interesting nonetheless. Part of the effect may be due to the fact that homesexual couples are more likely to be cohabiting since marriage is not an option: essentially they have to have more precautionary savings. If civil partnership is introduced, as is being discussed in Ireland, this would presumably lessen this effect.

Sexual Orientation and Household Savings: Do Homosexual Couples Save More?
Negrusa, Brighita & Oreffice, Sonia

We analyze how sexual orientation is related to household savings using 2000 US Census data, and find that gay and lesbian couples own significantly more retirement income than heterosexuals, while cohabiting heterosexuals save more than their married counterparts. In a household savings model, we interpret this homosexual-specific differential as due to the extremely low fertility of same-sex couples, in addition to the precautionary motives driving cohabiting households to save more than married ones. Evidence from homeowners' ratio of mortgage payments to house value exhibits the same pattern of savings differentials by sexual orientation and cohabiting status.

Religion and Savings

Economic Logic blog points to the following paper on religion and savings.

“Striving for Savings” – religion and individual economic behavior

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Author Info

Anja Klaubert (Klaubert@leuphana.de) (Institute of Economics, Leuphana University of Lüneburg, Germany)

Abstract

In the Neoclassical growth model the saving ratio and human capital might be seen as the most important factors fostering economic growth. At last since Weber [2005 (1904/05)] it seems clear, that religious beliefs and involvement shapes both social and economic human behavior. This paper tests the hypothesis whether religious belonging and believing influence a household’s economic decision-making in the USA, which was found to foster economic growth, namely the saving ratio at the individual level. Using data from the Panel Study of Income Dynamics (PSID), we find religious effects on saving. Regarding the decision to save money no large differences within the Christian religions, namely Protestants and Catholics, were found. However, large differences exist compared to non-religious people as well as to Non-Christians and Jews.

Catherine Rampell - Shift to Saving

An interesting NYT article, echoing some points touched on by Gerard O'Neill in his talk at Geary on the legacy of high savings rates that may result from the current downturn

link here