According to the study by the Department of Consumer Sciences and Retailing at Purdue University, wage earner participation in a retirement plan was predicted by:
- being older
- having some college education or a bachelors degree
- working full time
- working for a larger firm
- having a good idea of next year’s income
The study found that the factors that influenced the decision to be self-employed were also likely to decrease participation in plans, although it is possible that the self-employed are planning for retirement through other means such as investments in their businesses.
An alternative explanation could be that they plan to work indefinitely and have therefore delayed retirement planning.
However, the study also found that some of the determinants of participation were comparable for both wage earners and the self-employed.
- higher income
- a graduate education
- being white
- the belief that past income had outpaced inflation
The only other factor predicting plan participation for the self-employed was the expectation that future income would increase more than prices would.
In addition, the research found that small employers who do not offer retirement plans have:
- lower revenues
- younger employees
- employees who earn lower salaries
- employees with less formal education
- employees who tend to work short term
While those wage earners who do not participate in retirement plans are generally:
- younger workers
- non- white
- those with lower incomes
- less educated
- part-time workers
- those who work for smaller firms
Many of these wage earners may not be eligible for retirement plans because they have not worked long enough, or they may be eligible but are not participating, or are employed at a firm that does not provided a retirement plan.