A Little Can Go a Long Way: The Impact of Advertising Services on Program Take-Up

Abstract

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.