The Role of Choice Architecture in Promoting Saving at Tax Time: Evidence from a Large–Scale Field Experiment

Tax refunds give many low- and moderate-income (LMI) households a rare opportunity to save for unexpected expenses. We conducted three experiments aimed at increasing tax-time savings by LMI consumers. In a large field experiment, the most effective intervention increased the average savings deposits by about 50%. Delivered as people filed taxes online, this treatment consisted of a choice architecture intervention (a presentation of action choices that emphasized options for putting money into savings), combined with a message highlighting the need to save for emergencies. Two follow-up experiments simulated the tax-time situation and parsed components of the intervention. The first showed that the choice architecture and messaging interventions increased savings deposits independently. The second, assessing individual elements of the choice architecture intervention, showed that the mention of a savings option did not increase allocations by itself, but a heavy emphasis on savings or the ability to easily put money into savings did increase allocations.