Everyone Else Is Making a Mistake: Effects of Peer Error on Saving Decisions

Abstract

This paper describes an intervention to increase retirement saving among 1,254 federal employees. Specifically, we sent two emails encouraging employees to leave the default retirement contribution amount (3 percent of salary) and start saving enough to get the full match available to them (at least 5 percent of salary). Email 1 provided employees with personalized information, while Email 2 included similar information about their peers. We find that after 3.5 months, those who received either email were more than twice as likely to increase their contributions compared to those who received no email. Results both support previous research that personalized information can motivate action and raise questions about the nuances of peer influence.