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.
Linos, Elizabeth, Allen Prohofsky, Aparna Ramesh, Jesse Rothstein, and Matthew Unrath.
"Can Nudges Increase Take-Up of the EITC? Evidence from Multiple Field Experiments."
American Economic Journal: Economic Policy,
Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs