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

Tuomas Matikka and Tuuli Paukkeri ()
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Tuuli Paukkeri: VATT Institute for Economic Research

Empirical Economics, 2022, vol. 63, issue 6, No 16, 3253-3287

Abstract: Abstract The effectiveness of transfer programs in reducing poverty and inequality can be significantly reduced if eligible individuals fail to apply for them. This paper shows that benefit take-up can be influenced by sending targeted letters to the eligible population. We exploit the implementation of the guarantee pension program in Finland, which offered a monthly top-up benefit to low-income pensioners. The Social Insurance Institution sent information on the benefit together with application forms to a portion of the eligible population a month before implementation. We find clear evidence that this simple and inexpensive intervention increased take-up and prompted pensioners to apply sooner.

Keywords: Benefit take-up; Targeted mailings; Pension benefits (search for similar items in EconPapers)
JEL-codes: H24 H55 I38 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s00181-022-02230-8

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