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Does information increase the take-up of social benefits? Evidence from a new benefit program

Author

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  • Matikka, Tuomas
  • Paukkeri, Tuuli
Abstract
The effectiveness of transfer programs can be significantly reduced if eligible individuals fail to apply for them. In this paper we study the impact of information provision on the take-up of social benefits. We exploit the implementation of the guarantee pension program in Finland in 2011, which offered a minimum monthly pension (688 euros) to low-income pensioners. The Finnish Social Insurance Institution sent information letters and application forms to a portion of the eligible population a month before implementation. We find clear evidence that this mailing significantly increased take-up and prompted pensioners to apply sooner, showing that simple and inexpensive mailings can have a large effect on benefit take-up among individuals outside the labor force.

Suggested Citation

  • Matikka, Tuomas & Paukkeri, Tuuli, 2016. "Does information increase the take-up of social benefits? Evidence from a new benefit program," Working Papers 83, VATT Institute for Economic Research.
    • Handle: RePEc:fer:wpaper:83
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    File URL: https://www.doria.fi/handle/10024/148920
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    References listed on IDEAS

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    3. Saurabh Bhargava & Dayanand Manoli, 2015. "Psychological Frictions and the Incomplete Take-Up of Social Benefits: Evidence from an IRS Field Experiment," American Economic Review, American Economic Association, vol. 105(11), pages 3489-3529, November.
    4. Raj Chetty & Emmanuel Saez, 2013. "Teaching the Tax Code: Earnings Responses to an Experiment with EITC Recipients," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 1-31, January.
    5. Jeffrey B. Liebman & Erzo F. P. Luttmer, 2015. "Would People Behave Differently If They Better Understood Social Security? Evidence from a Field Experiment," American Economic Journal: Economic Policy, American Economic Association, vol. 7(1), pages 275-299, February.
    6. Henrik Jacobsen Kleven & Wojciech Kopczuk, 2011. "Transfer Program Complexity and the Take-Up of Social Benefits," American Economic Journal: Economic Policy, American Economic Association, vol. 3(1), pages 54-90, February.
    7. Francesca Zantomio, 2015. "The Route to Take-up: Evidence from the UK Pension Credit Reform," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 77(5), pages 719-739, October.
    8. Eric P. Bettinger & Bridget Terry Long & Philip Oreopoulos & Lisa Sanbonmatsu, 2012. "The Role of Application Assistance and Information in College Decisions: Results from the H&R Block Fafsa Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(3), pages 1205-1242.
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    Citations

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    Cited by:

    1. Tomer Blumkin & Tuomas Kosonen & Kaisa Kotakorpi, 2018. "Complexity and benefit take-up: Empirical evidence from the Finnish homecare allowance," Discussion Papers 123, Aboa Centre for Economics.
    2. Céline Marc & Mickaël Portela & Cyrine Hannafi & Rémi Le Gall & Antoine Rode & Stéphanie Laguérodie, 2022. "Quantifier le non-recours aux minima sociaux en Europe : un phénomène d’ampleur qui peine à susciter le débat," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-03618424, HAL.
    3. Per Engström & Eskil Forsell & Johannes Hagen & Arnaldur Stefánsson, 2019. "Increasing the take-up of the housing allowance among Swedish pensioners: a field experiment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 26(6), pages 1353-1382, December.
    4. Ahomäki, Iiro & Pitkänen, Visa & Soppi, Aarni & Saastamoinen, Leena, 2020. "Impact of a physician-targeted letter on opioid prescribing," Journal of Health Economics, Elsevier, vol. 72(C).
    5. Hagen, Johannes & Malisa, Amedeus, 2022. "Financial fraud and individual investment behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 203(C), pages 593-626.
    6. Nyman, Pär & Aggeborn, Linuz & Ahlskog, Rafael, 2022. "Filling in the blanks. How does information about the Swedish EITC affect labour supply?," Working Paper Series 2022:9, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    7. Céline Marc & Mickaël Portela & Cyrine Hannafi & Rémi Le Gall & Antoine Rode & Stéphanie Laguérodie, 2022. "Non-take-up of minimum social benefits: quantification in Europe," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-04082347, HAL.
    8. Nyman, Pär & Aggeborn, Linuz & Ahlskog, Rafael, 2023. "Filling in the blanks: How does information about the Swedish EITC affect labour supply?," Labour Economics, Elsevier, vol. 85(C).

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    More about this item

    Keywords

    social security; social benefits; impact of information; guarantee pension; sosiaalietuuksien alikäyttö; informaatio; Social security; taxation and inequality; D03; H24; H55;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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