The success of policy interventions is frequently stymied by the inability to induce take-up in target populations. In this article, I show that local advertising in combination with small financial lotteries increases the likelihood that low-income students apply for and receive state aid. I isolate causal impacts by estimating the change in completed aid applications in high schools where the advertising program was canceled due to the expiration of private funding compared with high schools that never participated in the advertising program. Using this differences-in-differences framework, I find that state aid applications declined by approximately 3% to 4% (or roughly four to six applications per high school). Furthermore, postsecondary enrollment in 4-year public colleges declined by about one-half to one percentage point in impacted high schools. These results suggest that small incentives may be a cost-effective means of promoting program take-up for marginal students.
AinslieG. (1975). Specious reward: A behavioral theory of impulsiveness and impulse control. Psychological Bulletin, 82, 463–496.
2.
AizerA. (2003). Low take-up in Medicaid: Does outreach matter and for whom?The American Economic Review, 93, 238–241.
3.
AngristJ. D.LangD.OreopoulosP. (2009). Incentives and services for college achievement: Evidence from a randomized trial. American Economic Journal: Applied Economics, 1, 136–163.
4.
BaickerK.CongdonW. J.MullainathanS. (2012). Health insurance coverage and take-up—Lessons from behavioral economics. The Milbank Quarterly, 90, 107–134.
5.
BarrA. (in press). Fighting for education: The effect of the post-9/11 GI bill on degree attainment. Journal of Labor Economics.
6.
BergmanP.DenningJ. T.ManoliD. (2017). Is information enough? Evidence from a tax credit information experiment with 1,000,000 students (IZA Working Paper No. 10997). Bonn, Germany: IZA Institute of Labor Economics.
7.
BergmanP.RogersT. (2016). The impact of defaults on technology adoption, and its underappreciation by policymakers (Working Paper 17-021). Cambridge, MA: Harvard Kennedy School.
8.
BertrandM.LuttmerE. F. P.MullainathanS. (2000). Network effects and welfare cultures. The Quarterly Journal of Economics, 115, 1019–1055. doi:10.1162/003355300554971
9.
BettingerE. P. (2004). How financial aid affects persistence. In HoxbyC. M. (Ed.), College choices: The economics of where to go, when to go, and how to pay for it (pp. 207-238). Chicago, IL: The University of Chicago Press.
10.
BettingerE. P.GurantzO.KawanoL.SacerdoteB. I. (2016). Long-term effects of financial aid: Evidence from the Cal Grants (NBER Working Paper No. 22347). Cambridge, MA: National Bureau of Economic Research.
11.
BettingerE. P.LongB. T.OreopoulosP.SanbonmatsuL. (2012). The role of simplification and information in college decisions: Results from the H&R block FAFSA experiment. The Quarterly Journal of Economics, 127, 1205–1242.
12.
BooijA. S.LeuvenE.OosterbeekH. (2012). The role of information in the take-up of student loans. Economics of Education Review, 31, 33–44. doi:10.1016/j.econedurev.2011.08.009
CarrollV. P.RaoA. G.LeeH. L.ShapiroA.BayusB. L. (1985). The navy enlistment marketing experiment. Marketing Science, 4, 352–374.
15.
CastlemanB. L.PageL. C. (2016). Freshman year financial aid nudges: An experiment to increase FAFSA renewal and college persistence. The Journal of Human Resources, 51, 389–415. doi:10.3368/jhr.51.2.0614-6458R
16.
CastlemanB. L.PageL. C.SchooleyK. (2014). The forgotten summer: Mitigating summer attrition among college-intending low-income high school graduates. Journal of Policy Analysis and Management, 32, 320–344.
17.
CurrieJ. (1996). The take-up of social benefits. In AuerbachA. J.CardD.QuigleyJ. M. (Eds.), Public policy and the income distribution (pp. 80–148). New York, NY: Russell Sage Foundation.
18.
DaponteB. O.SandersS.TaylorL. (1999). Why do low-income households not use food stamps? Evidence from an experiment. The Journal of Human Resources, 34, 612–628. doi:10.2307/146382
19.
DynarskiS. M. (2008). Building the stock of college-educated labor. The Journal of Human Resources, 43, 576–610.
20.
DynarskiS. M.Scott-ClaytonJ. E. (2006). The cost of complexity in federal student aid: Lessons from optimal tax theory and behavioral economics. National Tax Journal, 59, 319–356.
21.
DynarskiS. M.Scott-ClaytonJ. E.WiederspanM. (2013). Simplifying tax incentives and aid for college: Progress and prospects. Tax Policy and the Economy, 27, 161–202.
22.
EissaN.HoynesH. W. (2006). Behavioral responses to taxes: Lessons from the EITC and labor supply. Tax Policy and the Economy, 20, 73–110.
23.
FiglioD. N.HamersmaS.RothJ. (2015). Information shocks and the take-up of social programs. Journal of Policy Analysis and Management, 34, 781–804. doi:10.1002/pam.21855
24.
GabaixX. (2017). Behavioral inattention. In BernheimD.DellaVignaS.LaibsonD. (Eds.), Handbook of Behavioral Economics. New York, NY: Elsevier.
25.
Goldrick-RabS.KelchenR.HarrisD. N.BensonJ. (2016). Reducing income inequality in educational attainment: Experimental evidence on the impact of financial aid on college completion. American Journal of Sociology, 121, 1762–1817. doi:10.1086/685442
26.
HernanzV.MalherbetF.PellizzariM. (2004). Take-up of welfare benefits in OECD countries (OECD Social, Employment and Migration Working Papers 17). Paris, France: OECD Publishing.
27.
HoxbyC. M.TurnerS. E. (2013). Expanding college opportunities for high-achieving, low income students. Stanford, CA: Stanford Institute for Economic Policy Research.
JohnsonG. A.LewisR. A.NubbemeyerE. I. (2017). Ghost ads: Improving the economics of measuring online ad effectiveness. Journal of Marketing Research, 54, 867–884.
30.
LeuvenE.OosterbeekH.van der KlaauwB. (2010). The effect of financial rewards on students’ achievement: Evidence from a randomized experiment. Journal of the European Economic Association, 8, 1243–1265. doi:10.1111/j.1542-4774.2010.tb00554.x
31.
LevittS. D.ListJ. A.NeckermannS.SadoffS. (2013). The behavioralist goes to school: Leveraging behavioral economics to improve educational performance. American Economic Journal: Economic Policy, 8, 183–219.
32.
LewisR. A.RaoJ. M. (2015). The unfavorable economics of measuring the returns to advertising. The Quarterly Journal of Economics, 130, 1941–1973.
33.
LewisR. A.ReileyD. H. (2014). Online ads and offline sales: Measuring the effect of retail advertising via a controlled experiment on Yahoo!Quantitative Marketing and Economics, 12, 235–266. doi:10.1007/s11129-014-9146-6
34.
MadrianB. C.SheaD. F. (2001). The power of suggestion: Inertia in 401(k) participation and savings behavior. The Quarterly Journal of Economics, 116, 1149–1187. doi:10.1162/003355301753265543
35.
McGarryK. (1996). Factors determining participation of the elderly in supplemental security income. The Journal of Human Resources, 31, 331–358. doi:10.2307/146066
36.
MichalopoulosC.RobinsP. K.CardD. (2005). When financial work incentives pay for themselves: Evidence from a randomized social experiment for welfare recipients. Journal of Public Economics, 89, 5–29.
37.
SahniN. S. (2015). Effect of temporal spacing between advertising exposures: Evidence from online field experiments. Quantitative Marketing and Economics, 13, 203–247. doi:10.1007/s11129-015-9159-9
38.
SchouwenburgH. C. (1995). Academic procrastination: Theoretical notions, measurement, and research. In FerrariJ. R.JohnsonJ. L.McCownW. G. (Eds.), Procrastination and task avoidance: Theory, research, and treatment (pp. 71-96). New York, NY: Plenum.
Supplementary Material
Please find the following supplemental material available below.
For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.
For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.
