Applied Seminar 
Time: 12:15 pm – 13:30 pm
Date: 03th of november
Room : 3001

Claire LEROY (CREST) “Raising Take-up of Welfare Programs: Evidence from a Large French Reform”

Abstract : Imperfect take-up of social transfer programs has been a growing policy concern leading many governments to seek interventions to encourage take-up. This paper examines the effect of two types of intervention: an increase in benefit generosity and an information shock. Using a nationwide reform of France’s in-work transfer scheme and exhaustive social security data, I provide the first at-scale causal evidence of the role of money and information in shaping take-up behaviors. Using a difference-in-differences strategy, I estimate small and non-significant take-up responses to changes in monetary incentives, with an implied take-up elasticity of less than 0.1. In contrast, and exploiting additional data sources, I show that the media coverage of the reform acted as an information shock, that improved awareness and knowledge of the program, causing an 18% permanent surge in take-up in the month following the reform. This specific type of information provision intervention was successful even among populations traditionally perceived as harder to reach (e.g. those with no past contact with welfare agencies). Finally, I develop a theoretical framework to estimate the welfare effects of these interventions and draw broader policy implications. The model highlights that, in the case of in-work transfers, raising take-up might be socially desirable not only for equity motives but also for efficiency ones by encouraging joint take-up and labor supply responses.

Sponsors:
CREST