5th year PhD student, Ellen Stuart has been selected as a recipient of the 2020 National Bureau of Economic Research (NBER) Pre-Doctoral Fellowship in Retirement & Disability Research to pursue independent research aimed at the health, labor, behavioral, and other economic or policy aspects of retirement and disability. The award provides a stipend, a tuition payment, and a limited research fund to support costs such as travel expenses to professional meetings.

Ellen will use this fellowship to pursue research for her job market paper entitled The Impact of Withdrawal Penalties at Age Notches on Retirement Savings. Tax-related benefits and penalties are a critical part in how retirement savings accounts are designed to encourage taxpayers to save for retirement. Taxpayers face penalties for both withdrawing early (before age 59.5) and for failing to withdraw after age 70.5. The presence of the penalties distorts when taxpayers may otherwise choose to take distributions, resulting in bunching in when taxpayers begin taking distributions. Ellen and her co-author, Victoria Bryant of the Internal Revenue Service, employed a 16-year panel of individual taxpayers to explore the prevalence and size of the behavioral adjustment to these penalties. Reduced-form exercises suggest that a minimum of 5.2 million taxpayers are impacted by these thresholds, with $23.4 billion worth of distributions impacted. In the next stage of the project, Ellen and Victoria will estimate a dynamic life-cycle model using the simulated method of moments.

Ellen is extremely grateful to her advisors for their support and guidance.