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Emergency Fund Experiment
Last registered on November 19, 2020

Pre-Trial

Trial Information
General Information
Title
Emergency Fund Experiment
RCT ID
AEARCTR-0006749
Initial registration date
November 18, 2020
Last updated
November 19, 2020 9:53 AM EST
Location(s)

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Primary Investigator
Affiliation
Other Primary Investigator(s)
PI Affiliation
Voya Financial
PI Affiliation
Voya Financial
PI Affiliation
Brigham Young University and NBER
PI Affiliation
Harvard University and NBER
PI Affiliation
Yale School of Management and NBER
PI Affiliation
Harvard Business School and NBER
Additional Trial Information
Status
In development
Start date
2020-11-30
End date
2022-06-30
Secondary IDs
Abstract
Many households lack the liquidity to cover unexpected expenses, periods of unemployment, and other financial shocks. We are interested in learning more about ways to help households set money aside for these scenarios. By building up savings to weather negative shocks, households could achieve not only increased short-term financial security but also increased retirement security. However, many behavioral biases make it difficult to save. Employers can help workers overcome these biases by offering emergency savings accounts alongside traditional retirement accounts.

We are planning a two-arm trial to evaluate take-up, participation, and utilization of an after-tax 401(k) account -- framed as an emergency savings account -- among employees of a large US-based employer. Employees will be randomized into passive and active choice arms. The employer's 401(k) plans, including the after-tax option, are managed by Voya Financial.
External Link(s)
Registration Citation
Citation
Benartzi, Shlomo et al. 2020. "Emergency Fund Experiment." AEA RCT Registry. November 19. https://doi.org/10.1257/rct.6749-1.0.
Sponsors & Partners
Partner(s)
Type
private_company
Experimental Details
Interventions
Intervention(s)
We will randomly assign employees of a large US employer to receive either passive choice or active choice messaging about an after-tax 401(k) account.

Those in the passive choice arm will be able to make elections for the after-tax account, and to edit their existing elections for pre-tax and Roth accounts.

Those in the active choice arm will first be asked whether or not they would like to save for an emergency. Those that respond affirmatively will be given a pre-populated list of elections and asked to accept or edit the after-tax, pre-tax, and Roth values. Those that respond negatively will not be shown a pre-populated list, but will be able to make elections for the after-tax account, and to edit their existing elections for pre-tax and Roth accounts.
Intervention Start Date
2020-11-30
Intervention End Date
2021-03-31
Primary Outcomes
Primary Outcomes (end points)
Indicator variable for whether or not the individual had a strictly positive contribution rate to the after-tax (emergency) account at the end of the day on which the individual first encountered the passive-choice or active-choice treatment
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Contribution rates to the after-tax (emergency) account, before-tax account, and Roth account at the end of the day on which the individual first encountered the passive-choice or active-choice treatment; contribution rates to the after-tax (emergency) account, before-tax account, and Roth account as of 60 days after the individual first encountered the passive-choice or active-choice treatment; contribution rates to the after-tax (emergency) account, before-tax account, and Roth account as of December 31, 2021; balances in the after-tax (emergency) account, before-tax account, and Roth account as of December 31, 2021; withdrawals from the after-tax (emergency) account, before-tax account, and Roth account between the day on which the individual first encountered the passive-choice or active-choice treatment and December 31, 2021; rollovers from the after-tax (emergency) account, before-tax account, and Roth account between the day on which the individual first encountered the passive-choice or active-choice treatment and December 31, 2021; loans from the plan initiated between the day on which the individual first encountered the passive-choice or active-choice treatment and December 31, 2021
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
Employees will be randomized into two arms -- a passive choice arm and an active choice arm -- while visiting their Voya online account. Randomization will occur if a user arrives at the contribution rate elections page, which could happen because the user is responding to a logout pop-up or a landing page feature, or is independently seeking to edit their elections. We expect logout pop-ups to be the largest driver of study enrollment.

In the passive choice arm, users will see a contribution rate elections page that includes the elections for the after-tax account as well as the pre-tax and Roth options. Their current elections will be visible (e.g.: 6% pre-tax 401(k), 0% Roth 401(k), 0% after-tax 401(k)) and they will be able to input new values for all three accounts.

In the active choice arm, users will first be asked if they would like to start saving in an emergency fund.

Those who answer affirmatively will be taken to a pre-populated contribution rate elections page that includes current and suggested elections for all three accounts (e.g., pre-tax: 6% current, 6% suggested; Roth: 0% current, 0% suggested; after-tax: 0% current, 2% suggested). Users will be asked to either accept or edit the suggested elections. The suggested pre-tax and Roth elections will be the same as the current pre-tax and Roth elections. The suggested after-tax election will be 2%.

Those who answer negatively will, like subjects in the passive choice arm, see a contributions rate elections page that has not been pre-populated.
Experimental Design Details
Not available
Randomization Method
Algorithm (implemented by Voya)
Randomization Unit
Individual
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
3,000 individuals
Sample size: planned number of observations
3,000 individuals
Sample size (or number of clusters) by treatment arms
1,500 individuals per arm
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
National Bureau of Economic Research
IRB Approval Date
2020-11-13
IRB Approval Number
20_267