Directions: Read the passage carefully and answer the questions that follow. Certain words are given in quotes to help you locate them.
For most of the twentieth century, economists assumed that people who were offered more options would make better decisions, or at least decisions that suited them better. If a worker did not join a pension scheme, the reasoning went, it was because he had weighed the costs and benefits and concluded that saving was not worth it. The remedy, if any were needed, was more information.
This assumption has been badly shaken by a simple observation. In several countries, the share of workers who save for retirement changed dramatically when employers did nothing more than alter the default. Where workers had to fill in a form to join a pension scheme, many never got around to it. Where they were enrolled automatically and had to fill in a form to leave, most stayed. The workers were the same kind of people with the same wages; only the starting point had changed.
Supporters of such defaults argue that they respect freedom while correcting for 'inertia'. Nobody is forced to save; anyone who wishes can opt out with a single signature. Critics are less comfortable. A default, they point out, is never neutral: someone has to choose it, and the people who choose it may have interests of their own. A pension fund that is set as the default for millions of workers gains customers without having to compete for them, and the fees it charges may matter less to its managers than to the savers who never read the small print.
There is also a quieter worry. If people are steered into good choices without thinking about them, they may never learn to think about such choices at all. A worker who was automatically enrolled at a modest contribution rate may assume that the rate was chosen because it is sufficient, when in fact it was chosen because it was low enough not to 'provoke' many people into leaving. In this sense, a default can create the appearance of a decision where none has been made.
None of these objections amounts to an argument for abandoning defaults. The alternative, after all, is not a world without a starting point but one in which the starting point is to do nothing, which is itself a default and often the worst one available. The more useful lesson is that designing a default is a responsibility, not a trick. It requires asking not only which option most people would accept but which option would serve them best, and being open about who made that choice and why.
Q1.According to the first paragraph, how did economists traditionally explain a worker's decision not to join a pension scheme?
- The worker could not afford to save anything
- The worker had weighed the costs and benefits and decided that saving was not worth it
- The employer had made it difficult to join
- The pension fund charged very high fees
- The worker had never been told that the scheme existed
Q2.What does the observation described in the second paragraph show?
- Changing only the default option greatly changed how many workers saved, even though the workers and their wages were similar
- Most workers prefer to fill in forms rather than be enrolled automatically
- Workers with higher wages always save more for retirement
- Pension schemes become popular only when they are compulsory
- More information about pensions led workers to save more
Q3.Why, according to the critics, is a default never neutral?
- It applies only to workers with low wages
- It can be changed only with many signatures
- Someone has to choose it, and those who choose it may have interests of their own
- It forces people to save against their will
- It is always the worst option available