| This thesis comprises three chapters that investigate, from a behavioural economics perspective, how individuals prepare financially for retirement.;In Chapter 1, I investigate whether a savings 'nudge' is a viable mechanism to help people overcome knowledge barriers associated with saving for retirement. Using administrative tax records from Canada, I begin by estimating whether a nudge in workplace pensions increases net savings or induces workers to reduce contributions in other accounts. I find that a ;In Chapter 2, I analyze the welfare implications of savings nudges when agents face subjective uncertainty about how to prepare adequately for retirement, but can mitigate this risk through endogenous information acquisition. I show that whether an optimal nudge increases or decreases individuals' savings levels depends on whether they initially under- or over-save due to their subjective uncertainty. Moreover, policies targeting human capital formation are a viable substitute for nudging, a result that policy-makers should consider when deciding on socially efficient programs for encouraging individuals to save.;In Chapter 3, I examine the effect of withholding taxes on pre-retirement withdrawals from retirement savings account. Specifically, I estimate the elasticity of withdrawals to the net-of-withholding tax rate to be 1.5 for prime-aged savers. This finding suggests withholding taxes discourage pre-retirement withdrawals, serving as a de facto savings commitment device. Hence, individuals sometimes struggle to save adequately for retirement for reasons that are not well-explained by rational agency. I show that theories of present-biased preferences provide a better explanation. |
