Can Nudges Increase Take-Up of the EITC? Evidence from Multiple Field Experiments
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Abstract
The Earned Income Tax Credit distributes more than $60 billion to over 20 million low-income families annually. Nevertheless, an estimated one-fifth of eligible households do not claim it. We ran six preregistered, large-scale field experiments with 1 million observations to test whether "nudges" could increase EITC take-up. Despite varying the content, design, messenger, and mode of our messages, we find no evidence that they affected households' likelihood of filing a tax return or claiming the credit. We conclude that even the most behaviorally informed low-touch outreach efforts cannot overcome the barriers faced by low-income households who do not file returns.Citation
Linos, Elizabeth, Allen Prohofsky, Aparna Ramesh, Jesse Rothstein, and Matthew Unrath. 2022. "Can Nudges Increase Take-Up of the EITC? Evidence from Multiple Field Experiments." American Economic Journal: Economic Policy, 14 (4): 432-52. DOI: 10.1257/pol.20200603Additional Materials
JEL Classification
- C93 Field Experiments
- D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
- H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
- I38 Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
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