Guillermo Carranza

Earnings Shocks and Consumption Inside the Household [draft coming soon]

with Jin Cao

Job Market Paper

Improving 401(k) Matches Using Hypothetical Choices abstract

with Fiona Greig, Cormac O’Dea, Taha Choukhmane, and Lawrence Schmidt

Revise and resubmit, Quarterly Journal of Economics

How should employer 401(k) matching formulas, which allocate $250 billion annually, be designed to raise employee saving and reduce inequality in employer contributions? We use survey responses to hypothetical scenarios to predict how individuals would save under counterfactual policies. We then characterize the frontier of achievable saving-equity combinations. We find that survey responses accurately predict contribution choices in administrative 401(k) data, employee contributions are inelastic to the match rate, and non-elective contributions do not crowd out employee saving. Therefore, a lower match rate applied up to a higher cap paired with a non-elective contribution achieves higher savings and more equitable employer contributions. Many existing formulas, including those designated as safe harbors by regulation, are dominated along both dimensions.

Retention or Regressivity? The Empirical Effects of 401(k) Vesting Schedules abstract

with Aaron Goodman

Revise and resubmit, Journal of Finance (2nd round)

Vesting requirements are a common yet understudied feature of defined-contribution retirement plans. Using administrative recordkeeping data, we find that 30% of separations occur during participants' vesting periods. The resulting forfeitures of employer contributions are concentrated among lower-income participants and make the distribution of 401(k) compensation significantly more regressive. Firms do not enjoy offsetting efficiency benefits: employing both cross-plan and within-plan identification strategies, we find no evidence that vesting exerts a causal retention effect. A linked survey shows informational frictions to be a key mechanism, as a majority of respondents do not know their current plan's vesting rules.

with Leo Feler and Kamila Janmohamed

with Florian Caro, Valerie Michelman, and Seth Zimmerman

with Cormac O’Dea, Taha Choukhmane, and Lawrence Schmidt, Brookings Institution Retirement Security SECURE 3.0 Initiative

with Fiona Greig, Cormac O’Dea, Taha Choukhmane, and Lawrence Schmidt, Tobin Center for Economic Policy

with Fiona Greig, Aaron Goodman, and Kelly Hahn, Vanguard Research

with Fiona Greig, Anna Madamba, Cormac O’Dea, Taha Choukhmane, and Lawrence Schmidt, Vanguard Research