Participation in Social Programs by Consumers and Companies: A Nationwide Analysis of Participation Rates for Telephone Lifeline Programs

Abstract

We examine a unique public assistance program, the Lifeline Program, to consider why people do not participate in a program that provides them with financial benefits. Lifeline is a nationwide program created by the Federal Communications Commission to provide price discounts to low-income telephone subscribers. Recently there has been concern that program participation rates are low and that there is great variation in participation across states. Using state-level panel data, we consider reasons Lifeline participation varies among states and why only approximately one third of eligible households nationwide enroll in the program. We find that participation is actually closely aligned with what is predicted given state characteristics when we control for socio-economic and demographic characteristics. We also find that in addition to the demographic factors affecting participation, telecommunications companies appear to affect Lifeline participation rates.