The role of social norms in retirement saving: Evidence from two natural field experiments

Under-saving for retirement is a challenge for society, businesses, and individuals. Therefore, behavioral interventions that promote saving are valuable for economic and social well-being. Previous research demonstrates that retirement saving can be influenced by social-psychological mechanisms such as peer effects and norms. However, few large-scale experiments have investigated the role of different types of social norms in boosting retirement savings. Even fewer studies have examined how the time-framing (e.g., focusing on the present choice of saving vs. the future benefits of current saving) of such norms influences behavior. This paper provides real-life experimental evidence on the effects of (1) descriptive vs. injunctive norms on retirement saving behavior across two stages of the decision-making process (information search and saving behavior), and (2) the time-framing of such norms. Specifically, we conduct two large-scale field experiments on Norway-based bank customers in their online user interface, testing the effects of different norm messages on actual saving behavior. Study 1 (N = 455,509) finds that although injunctive (vs. descriptive) norms lead to higher click-through rates, descriptive norms are more effective than injunctive norms in increasing actual retirement savings. In essence, information about what most other people do (descriptive norms) was more effective in changing behavior than expert opinion on what one should do (injunctive norms). In Study 2 (N = 224,000), we vary descriptive norms across two saving schemes in a 2 (descriptive norm: present-focused vs. future-focused) X 2 (scheme: save-more-tomorrow vs. save-more-today) design. We find stronger effects of present-focused descriptive norms than future-focused descriptive norms in general, driven by differences in the save-more-today scheme. Effect sizes were generally small, but economically meaningful due to the low intervention costs of large-scale implementation. As a whole, our findings broaden the understanding of how social norms and their time-framing influence long-term saving behavior.