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Abstract: How do workers value retirement benefits relative to wages and what impact do these benefits have on firm hiring? I find that dollars paid in employer contributions to 401(k) plans have nearly double the effect on a firm's recruiting success than dollars paid in wages. However, there is significant heterogeneity in the effect of employer contributions across the income and age distribution: the effect is driven primarily by high-income and higher-age occupations. Since firms endogenously select their compensation bundles to attract their desired workers, I use two novel instruments to identify the results: 1) IRS mandated non-discrimination testing of retirement plans and 2) corporate policies of national wage setting. I then develop and estimate an on-the-job search model which shows that the average worker requires only a 0.25 percentage point increase in employer contribution dollars to offset a 1% decrease in wages. Moreover, moving from a job with no retirement plan to a job with a plan increases valuations by the same magnitude as 2% increase in wages. Again, retirement valuations are positively correlated with salary. I confirm the channel in an online survey setting: participants are willing to give up total pay to get a higher employer match to get a non-matching employer-sponsored 401(k). The results imply that 80% of firms in the estimation sample could improve their probability of a job offer being accepted by increasing 401(k) contributions.

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Abstract: This paper documents the share of investable wealth that middle-class U.S. investors hold in the stock market over their working lives. This share rises modestly early in life and falls significantly as people approach retirement. Prior to 2000, the average investor held less of their investable wealth in the stock market and did not adjust this share over their working life. These changes in portfolio allocation were accelerated by the Pension Protection Act (PPA) of 2006, which allowed employers to adopt target date funds (TDFs) as default options in retirement saving plans. Young retail investors who start at an employer shortly after it adopts TDFs have higher equity shares than those who start at that same employer shortly before the change in defaults. Older investors rebalance more to safe assets. We also study retirement contribution rates over the life-cycle and find that average retirement saving rates increase steadily over the working life. In contrast to what we find for investment in the stock market, contribution rates have been stable over time and across cohorts and were not increased by the PPA.

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Abstract: This paper uses administrative data from a private payroll processor whose clients are primarily very small businesses (median 5 employees) to measure the effects of financial relief received through the Paycheck Protection Program (PPP). Firms that applied for PPP funds increased their average employment by 7.5% in the five months following the program’s launch relative to otherwise similar firms that did not apply. The positive effects on employment occur primarily in industries in which firms were less affected by government shut-downs or higher levels of COVID-19, namely industries with more employees that are able to work remotely, those that have fewer hourly workers and essential businesses. Novel data on hiring also shows that the program worked as intended by preserving employment matches: positive employment effects occurred due to fewer layoffs, not through more hiring of new or former employees. My estimates imply a cost of approximately $270,000 per job per year at small firms