How can we better connect low-income families to their stimulus payments?
Project Summary
In response to the Covid-19 pandemic, the US government disbursed a range of income-based stimulus payments, including an expanded Child Tax Credit (CTC), via the tax system. But people whose income falls below the tax filing threshold–so-called “non-filers”–are at risk of missing out on these critical antipoverty benefits. In a series of randomized evaluations, we are testing methods of increasing claiming of the CTC and other economic impact payments among likely non-filers in California. These findings will contribute to our understanding of the barriers individuals face to accessing government programs, and inform policymakers’ efforts to reach the hardest-to-reach populations.
Why is this issue important?
In order to offset the economic consequences of the Covid-19 pandemic, the US government allocated an unprecedented amount of funding to direct economic impact payments (also called stimulus payments). In order to disburse these payments quickly and efficiently, they relied on the tax system. People who had not filed their taxes in prior years, however, were left out–unless they proactively claimed their payments through separate channels established for “non-filers.” There is extensive evidence that informational, logistical, and psychological barriers can deter people from interacting with government programs–even when they stand to benefit from doing so. Understanding these barriers, and how to reduce them, is critical for connecting low-income Americans with vital services and programs such as the economic impact payments.
What are we doing?
In partnership with California Policy Lab (CPL), the California Department of Social Services (CDSS), and Code for America (CfA), we are designing and conducting three randomized evaluations to test methods of increasing take-up of the CTC and other economic impact payments among likely non-filers in California. In Fall 2021, we tested the impact of messaging language and modality among approximately 430,000 low-income families who had not filed their taxes in 2018 or 2019. In Spring 2022, we evaluated the effect of targeted text messaging (relative to mass outreach), as well as different message content, among approximately 235,000 low-income families across California. A third round of outreach and an associated evaluation is planned for Fall 2023.
What have we learned?
As of November 2021, at least $2.4 million in income-based stimulus payments had been disbursed that could be linked directly to the Fall 2021 outreach effort. Around two-thirds of applications linked to this effort were accepted--higher than the overall average among all users of the simplified non-filer tool. Additional results are forthcoming.
What comes next?
Results from the evaluations of Fall 2021 and Spring 2022 outreach are expected in Summer and Fall 2022, respectively. The third phase of this project will be implemented in Fall 2022, with results expected in early 2023. These findings will inform policymakers’ efforts to find and connect the hardest-to-reach populations with government programs.