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Publication year
Psychological Frictions and the Incomplete Take-Up of Social Benefits: Evidence from an IRS Field Experiment
Resource type
Authors/contributors
- Bhargava, Saurabh (Author)
- Manoli, Dayanand (Author)
Title
Psychological Frictions and the Incomplete Take-Up of Social Benefits: Evidence from an IRS Field Experiment
Abstract
We address the role of "psychological frictions" in the incomplete take-up of EITC benefits with an IRS field experiment. We specifically assess the influence of program confusion, informational complexity, and stigma by evaluating response to experimental mailings distributed to 35,050 tax filers who failed to claim $26 million despite an initial notice. While the mere receipt of the mailing, simplification, and the heightened salience of benefits led to substantial additional claiming, attempts to reduce perceived costs of stigma, application, and audits did not. The study, and accompanying surveys, suggests that low program awareness/understanding and informational complexity contribute to the puzzle of low take-up. (JEL C93, D03, H24, M38)
Publication
American Economic Review
Volume
105
Issue
11
Pages
3489-3529
Date
2015-11
Citation
Bhargava, S., & Manoli, D. (2015). Psychological Frictions and the Incomplete Take-Up of Social Benefits: Evidence from an IRS Field Experiment. American Economic Review, 105, 3489–3529.
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