How Education Affects Retirement Plan Participation
WASHINGTON, DC, January 8, 2009 -- The October 2008 EBRI Issue Brief , which reports on employment-based retirement plan participation in 2007, answers this and other questions. The Issue Brief, published by the nonpartisan Employee Benefit Research Institute (EBRI), says that workers with lower educational attainment have lower levels of retirement plan participation. And it notes educational attainment also has a strong correlation with earnings.
The Issue Brief makes these additional points for 2007:
- When controlling for earnings, the most highly educated workers still had the highest levels of participation in a retirement plan, but the differences with the less educated workers were much smaller, particularly as earnings decreased.
- Workers with the least education (no high school diploma) had significantly lower levels of retirement plan participation than those with at least a high school diploma. Specifically, 50.7 percent of those without a high school diploma and making $50,000 or more participated in a retirement plan, compared with 65.0 percent of those with the same earnings and only a high school diploma and 76.1 percent of those with a graduate or professional degree.
Here are two examples showing retirement plan participation for working age (21 64) wage and salary workers in 2007:
Annual earnings: $15,000 - $29,999
- No high school diploma: 17.8 percent participate in a retirement plan.
- High school diploma: 33.3 percent participate.
- Some college: 37.9 percent participate.
- Bachelor's degree: 40.8 percent participate.
- Graduate/professional degree: 39.5 percent participate.
Annual earnings: $30,000 - $49,999
- No high school diploma: 36.1 percent participate in a retirement plan.
- High school diploma: 54.7 percent participate.
- Some college: 58.8 percent participate.
- Bachelor's degree: 63.0 percent participate.
- Graduate/professional degree: 69.0 percent participate.
Data in the Issue Brief are based on the U.S. Census Bureau's March 2008 Current Population Survey. The full Issue Brief is available at www.ebri.org/pdf/briefspdf/EBRI_IB_10-2008.pdf
About EBRI
Fast Facts from EBRI is issued by the nonpartisan Employee Benefit Research Institute to highlight benefits information that may be of current interest. Established in 1978, EBRI is an independent nonprofit organization committed exclusively to data dissemination, policy research, and education on economic security and employee benefits. EBRI does not take policy positions and does not lobby. www.ebri.org
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