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The Race/Ethnicity Gap in Retirement Plan Participation: More than Just Demographics
By David Blanchett
American companies have been actively shifting away from defined benefit (DB) plans towards defined contribution (DC) plans for decades. This shift places more burden on workers to make decisions like whether to participate in the retirement plan, how much to save, and how to invest those savings. This analysis explores how participation in a workforce retirement plan varies by race and ethnicity leveraging data from the Annual Social and Economic Supplement (ASEC) to the 2023 Current Population Survey (CPS).
The research demonstrates that underrepresented American workers are less likely to have access to a retirement plan at work and are less likely to save in one when it’s available. These effects persist even after controlling for variables such as gender, marital status, age, income, employer size, education level, industry, occupation, as well as race and ethnicity. Overall, this analysis suggests underrepresented American workers face a unique set of barriers when it comes to participating in workforce retirement plans, which may have significant long-term implications on the retirement security of these groups.
Source: SSRN
