At a time of nearly desperate negotiations to find savings needed to avert the fiscal cliff, ending the taxpayer subsidy–to the tune of $100 billion–of retirement savings accounts seems to many to be a no-brainer.

After all, a comprehensive and authoritative new study estimates that each dollar spent on the subsidy results in just a penny in increased savings. The study by U.S. and Danish researchers looked at Denmark's retirement system because it is similar to ours and because the Danish government keeps far more detailed data on saving patterns.

Conducted by Harvard economists Raj Chetty, recipient of the MacArthur Foundation's 2012 genius grant, and John Friedman, together with a team of Danish economists, the study found that only a segment of savers–those who are wealthiest–respond to tax subsidies.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including and

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.