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The authors conducted a field experiment to evaluate the effect of receiving information about the retirement savings decisions of one's peers. Non-participants and low savers in one firm's 401(k) plan received letters enabling them to enroll or increase their plan contribution rate by returning a simple reply form. Some employees were randomly assigned to receive peer information: a statement about the fraction of their coworker peers who were participating in the plan or a statement about the fraction of their coworker peers who were contributing at least 6% of their salary to the plan. Other employees were randomly assigned to receive no such peer information. They find conflicting evidence on the impact of peer information. Among nonunionized non-participants, there is some evidence that peer information leads to a small increase in participation. But among unionized non-participants, savings plan enrollment was reduced by peer information. These results highlight the possibilities and limitations of using peer information interventions to influence behavior.

The research described in this report was prepared for the Social Security Administration and conducted by the Financial Literacy Center.

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