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

Author

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  • Tuomas Matikka

    (VATT Institute for Economic Research
    CESifo)

  • Tuuli Paukkeri

    (VATT Institute for Economic Research)

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.

Suggested Citation

  • Tuomas Matikka & Tuuli Paukkeri, 2022. "Does sending letters increase the take-up of social benefits? Evidence from a new benefit program," Empirical Economics, Springer, vol. 63(6), pages 3253-3287, December.
    • Handle: RePEc:spr:empeco:v:63:y:2022:i:6:d:10.1007_s00181-022-02230-8
    DOI: 10.1007/s00181-022-02230-8
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    References listed on IDEAS

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    1. Mastrobuoni, Giovanni, 2011. "The role of information for retirement behavior: Evidence based on the stepwise introduction of the Social Security Statement," Journal of Public Economics, Elsevier, vol. 95(7), pages 913-925.
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    Cited by:

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    More about this item

    Keywords

    Benefit take-up; Targeted mailings; Pension benefits;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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