Nudges to Increase Completion of Welfare Applications: Experimental Evidence from Michigan

Christopher J O'Leary,Dallas Oberlee,Gabrielle Pepin

doi:10.2139/ssrn.3725479

Abstract

The Temporary Assistance for Needy Families (TANF) program provides cash assistance to very-low-income families with children. Application procedures to receive TANF benefits, however, often involve substantial transaction costs likely to reduce take-up. We estimate, through a randomized controlled trial design, the effects of a detailed telephone-call reminder to increase TANF application completion in southwest Michigan, where applicants must visit a regional public employment office at least four times to be eligible for benefits. We do not find that personalizing reminder calls increased participation in the initial appointment at the public employment office. However, conditional on attending the initial session, applicants who received reminder calls before additional appointments were more likely to complete all application requirements, compared to those who did not receive reminders. Evidence suggests that reminder calls increase attendance at public employment office appointments but that personalizing such calls has limited impact.

Highlights

The Temporary Assistance for Needy Families (TANF) program provides cash assistance to very-low-income families with children in the United States
PATH replaced Michigan’s previous welfare-to-work program, known as Jobs, Employment, and Training, and mandated that TANF applicants spend several weeks demonstrating employability skills to be eligible for cash assistance
We show that, on average, there are no significant differences in characteristics between individuals randomly assigned to the control group and individuals scheduled for orientation sessions earlier in 2015

Summary

INTRODUCTION

The Temporary Assistance for Needy Families (TANF) program provides cash assistance to very-low-income families with children in the United States. We estimate, through a randomized controlled trial design, the effects of a low-cost intervention to increase completion of TANF applications in a four-county region of southwest Michigan. Before their first appointment at a regional public employment office, all of Michigan’s TANF applicants receive a short reminder telephone call that lists the appointment date, time, and location. The local agency that coordinates Michigan’s TANF application process for area residents, provided detailed or in-depth telephone calls to some applicants During these calls, in addition to listing the appointment’s date, time, and location (as in the phone calls normally made to applicants), callers emphasized services and employment networks the agency uses to connect applicants to employment opportunities and welcomed questions regarding orientation. Understanding how low-cost nudges within the welfare application process affect benefit receipt is of policy importance because even small changes in income could improve the living standards of very-low-income families

BACKGROUND

RESULTS

DISCUSSION