Gender Gap in Retirement Savings

In this roundup of B-school research: why women are better savers, it's good to talk up your rivals, and how a logo can spark ideas

by Francesca Di Meglio and Alison Damast

Women are more motivated than men to save for retirement, according to a recent report from the Tuck School of Business at Dartmouth College. The research, by Dartmouth professors Punam Anand Keller and Annamaria Lusardi, found that women are driven to save because of worries that they'll have to work longer to maintain a certain lifestyle and attain medical care and a fear that they'll lose their home and be dependent on family.

Men, on the other hand, were more likely to say they would not have to stop working and believed they would need less money when they retired. Some also suggested they preferred feeling good now instead of in the future. This thinking is what prevents some from saving for retirement, says Keller, whose team conducted surveys, in-depth interviews, and focus groups for the research.

The goal of the study, says Keller, was to determine how best to market employee well-being programs, including those related to financial health. She and her team used the findings, which will appear in the book Overcoming the Saving Slump: How to Increase the Effectiveness of Financial Education and Saving Programs (University of Chicago Press, due out in Fall, 2008), to develop a program designed to motivate employees of companies to sign up for retirement saving initiatives.

A Tastier Carrot

Using a social marketing approach to saving for retirement, the researchers created a program for Dartmouth that targeted groups that were less likely to save. "I use the power of marketing and persuasion tactics to devise new savings programs for people who may be aware of the need to save, but this awareness does not translate into behavior," writes Keller in a two-page summary of the findings.

Her team offered a one-sheet explanation of how people could get started with saving, created a Web site that features real people sharing their personal stories about saving, and did what it could to lower the barriers that were preventing people from signing up for employee saving programs. For example, people who do not have a computer at the ready were using that as an excuse not to sign up, so Keller informed those who attended meetings where laptops were available nearby. "We wanted to motivate them," says Keller.

Apparently, the project was successful. As a result of these efforts, which Keller says are inexpensive for companies to initiate, the rate of Dartmouth employees electing retirement plans more than tripled in a 30-day period after the program's launch. More organizations are seeking help in this area. Keller is working with the Financial Industry Regulatory Authority (FINRA), National Endowment for Financial Education (NEFE), and AARP to help them apply social marketing to financial planning for their members.

It Helps to Mention the Competition

You're better off talking about your competition if you're interested in establishing a new market, according to a study published in the April, 2008, issue of the American Sociological Review. Traditionally innovators have been instructed to speak solely about their products and services when relaying their message to the media. However failing to mention your competitors can backfire because journalists might be inclined to consider you a "lone voice" that they can overlook, according to the research of Mark Thomas Kennedy, assistant professor at the University of Southern California Marshall School of Business.