Photo by Russ Campbell

Photo by Russ Campbell

Humans can be self-destructive. We overindulge in food and fail to make time to exercise, and we delay saving for retirement. Associate Professor John Beshears, whose research focuses on behavioral economics, has identified hope: The idea of a “fresh start” could help save us from ourselves.

Beshears collaborated on a field study in which 6,000 university employees were asked if they’d like to increase their retirement contributions right away or if they’d prefer to make an increase in the near future. When the future date was associated with a clean slate of some kind—such as a birthday or the arrival of spring—it increased the likelihood that an employee would sign on. In fact, those nest-egg contributions increased by 25 percent.

Why does this work? We often convince ourselves that our bad habits are part of our identity, yet there are certain moments in time that stand out from the rest of life and create an opportunity to make a psychological break from the past, Beshears says. These moments, such as a new calendar year or a birthday, lend themselves to high-level thinking in a way that the average Tuesday just doesn’t.

This fresh-start finding can be applied to “a whole range of behaviors where there’s a virtuous option with long-term gains that we should be engaging in and a tempting one with short-term gains,” Beshears observes. That might include tackling a challenging work project, facing up to a difficult conversation, or starting a smoking-cessation program. “Fresh starts make a wonderful time to commit to being the type of person who tackles those important items and actually delivers on them,” he notes.

One of the more satisfying aspects of this study was knowing that HR departments could use the findings to drive deeper engagement with their benefits programs, Beshears says. “There are a lot of researchers who are champing at the bit for ways to test these ideas in the real world, and we always hope that partnerships like these can lead to benefits that both sides can enjoy.”

“Using Fresh Starts to Nudge Increased Retirement Savings,” by John Beshears, Hengchen Dai, Katherine Milkman, and Shlomo Benartzi

Post a Comment