Multiple Myopias, Multiple Selves, and the under-Saving Problem

In both public policy debate and the academic literature, there is widespread, though not universal, agreement that millions of Americans are saving too little for their own retirements. If this is true, we could potentially increase such individuals' welfare through the adoption of policies that result in their saving more. A key dilemma, however, is that, unless one understands why people are under-saving, it is hard to evaluate the likely responses to or meritsof a given policy. The leading causal accounts differ predictively, with regard to how they suggest that people subject to them will respond to a given policy.

They also differ diagnostically, with regard to whether the increased saving induced would be by the "right" people (i.e., those whom we believe are under-saving). Yet they can be hard to tell apart in practice. What is more, the same individual may be subject to several at once, or to alternative ones at different times. This Article aims to improve theoretical understanding of the likely relationship between alternative explanations for under-saving and such issues as (1) the design of income tax rules designed to encourage retirement saving, (2) the choice between income taxation and consumption taxation, and (3) the proper design of Social Security