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American Economic Journal: Economic Policy: Vol. 2 No. 2 (May 2010)

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Child Benefit Support and Method of Payment: Evidence from a Randomized Experiment in Belgium

Article Citation

Huysentruyt, Marieke, and Eva Lefevere. 2010. "Child Benefit Support and Method of Payment: Evidence from a Randomized Experiment in Belgium." American Economic Journal: Economic Policy, 2(2): 163-84.

DOI: 10.1257/pol.2.2.163

Abstract

We examine the effects of information and information presentation format on individuals' choice of payment method in a large randomized experiment carried out with the Belgian National Office for Family Benefits. We find that a one-time mailing providing information about method of payment for child benefit support caused a fourfold increase in parents' decision to switch from payment by check to electronic payment. Simple, low-cost supplements significantly raised people's responsiveness to the mailing. Our results suggest that complexity and information (processing) costs pose significant barriers to transitioning to electronic payment methods, and that deliberate efforts to lower these costs can contribute to large behavioral changes. (JEL D83, J13)

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Authors

Huysentruyt, Marieke (London School of Economics and SITE, Stockholm School of Economics)
Lefevere, Eva (Herman Deleeck Centre for Social Policy, U Antwerp)

JEL Classifications

D83: Search; Learning; Information and Knowledge; Communication; Belief
J13: Fertility; Family Planning; Child Care; Children; Youth

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