Increasing the take-up of the housing allowance among Swedish pensioners: a field experiment
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Increasing the take-up of the housing allowance among Swedish pensioners: a field experiment Per Engström1 · Eskil Forsell2 · Johannes Hagen3,4
· Arnaldur Stefánsson5
© The Author(s) 2019
Abstract Using a randomized field experiment in the Swedish pension system, we investigate whether receiving an information letter affects the take-up rate of the housing allowance for pensioners. We also investigate whether the framing of the information letter affects take-up. The results show that simple information letters had a significant effect on the application rate and subsequent take-up rate: The baseline application rate in the targeted control population was only 1.4%, while the corresponding rates in the different treatment groups were between 9.9 and 12.1%. However, while the applications in the control group were accepted in almost 3 out of 4 cases, up to 50% of the applications in the treatment group were declined. The lower conditional acceptance rate in the treatment group seems to be largely driven by wealth, which the Pensions Agency cannot observe prior to submission. Information campaigns aimed at increasing benefit take-up therefore need careful design in situations with imperfect targeting. Keywords Benefit take-up · RCT · Nudge
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Johannes Hagen [email protected] Per Engström [email protected] Eskil Forsell [email protected] Arnaldur Stefánsson [email protected]
1
Department of Economics and UCFS, Uppsala University, Uppsala, Sweden
2
Department of Economics, Stockholm School of Economics, Stockholm, Sweden
3
Jönköping International Business School, Jönköping University, Jönköping, Sweden
4
Department of Statistics and UCFS, Uppsala University, Uppsala, Sweden
5
Department of Economics, UCFS and UCLS, Uppsala University, Uppsala, Sweden
123
P. Engström et al.
JEL Classification H24 · H55 · C93 · D90
1 Introduction A common feature of various means-tested social benefit programs is that the targeted individuals fail to take up their benefits (Currie 2006). Empirical estimates typically indicate low take-up (see, e.g., Blank and Ruggles 1996; U.S. Department of Health & Human Services 2015; Department for Work and Pensions 2008; Riphahn 2001; Gustafsson 2002).1 Incomplete take-up reduces the effectiveness of social programs and limits the ability of the government to reduce poverty. It is therefore of central policy importance to understand how take-up can be affected. The various factors that might explain why individuals do not apply for the benefits they are entitled to have generally been categorized into lack of information, information costs, transaction costs, stigma and complexity/non-transparency (Currie 2006; Remler et al. 2001). However, little is known about the relative importance of these factors in different parts of the population. Using a randomized field experiment in the Swedish pension system, we investigate whether information letters with different framing affect the take-up rate of housing allowance for pensioners. Specifically, fro
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