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Saving incentives for low and middle-income families: Evidence from a field experiment with H&R Block
Last registered on May 31, 2016

Pre-Trial

Trial Information
General Information
Title
Saving incentives for low and middle-income families: Evidence from a field experiment with H&R Block
RCT ID
AEARCTR-0001201
Initial registration date
May 31, 2016
Last updated
May 31, 2016 11:22 AM EDT
Location(s)
Primary Investigator
Affiliation
MIT
Other Primary Investigator(s)
PI Affiliation
Department of Economics, University of California, Berkeley
PI Affiliation
Harvard Kennedy School
PI Affiliation
Brookings Institute
PI Affiliation
Brookings Institute
Additional Trial Information
Status
Completed
Start date
2005-03-05
End date
2005-04-05
Secondary IDs
Abstract
We analyze a randomized experiment in which 14,000 tax filers in H&R Block offices in St. Louis received matches of zero, 20 percent, or 50 percent of IRA contributions. Take-up rates were 3 percent, 8 percent, and 14 percent, respectively. Among contributors, contributions, excluding the match, averaged $765 in the control group and $1100 in the match groups. Taxpayer responses to similar incentives in the Saver’s Credit are much smaller. Taxpayers did not game the experiment by receiving a match and strategically withdrawing funds. Tax professionals significantly influenced contribution choices. These results suggest that both incentives and information affect behavior.
External Link(s)
Registration Citation
Citation
Duflo, Esther et al. 2016. "Saving incentives for low and middle-income families: Evidence from a field experiment with H&R Block." AEA RCT Registry. May 31. https://doi.org/10.1257/rct.1201-1.0.
Former Citation
Duflo, Esther et al. 2016. "Saving incentives for low and middle-income families: Evidence from a field experiment with H&R Block." AEA RCT Registry. May 31. https://www.socialscienceregistry.org/trials/1201/history/8541.
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Experimental Details
Interventions
Intervention(s)
The experiment was conducted across 60 H&R Block offices in the St. Louis metropolitan area. Tax professionals in sample offices were trained to offer their clients a matching rate if they chose to contribute to an IRA account from their tax refund. Clients that electronically prepared their tax returns were randomly assigned one of three match rates for their IRA contributions. When a client was deciding how much to contribute to their IRA, they were told a (randomly chosen) rate at which their contributions would be matched, potentially influencing their contribution amount. Roughly one third received a 20 percent match rate, another third received a 50 percent match rate and the rest received a match rate of 0 percent, functioning as a comparison group. Individuals could receive up to $1,000 in matched funds. IRAs are individually owned, so the same offer was extended to each spouse for married tax filers filing jointly.
Intervention Start Date
2005-03-05
Intervention End Date
2005-04-05
Primary Outcomes
Primary Outcomes (end points)
1) IRA take up rate
2) Amount contributed to IRA account
Primary Outcomes (explanation)
Outcomes were evaluated from electronic data provided by H&R Block, which stripped the data of any individual identifiers such as name, Social Security number, phone numbers, addresses, office names, etc. The data included information from the tax return, X-IRA contributions, other information collected by H&R Block during tax preparation, and information about the tax professional.
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
Almost 600 tax professionals in the sample offices were given an hour-long training for the experiment and H&R's standard tax preparation software was modified so that the tax preparer would see special screens prompting to ask clients whether they wanted to contribute to the IRA account, and the match amount if client agreed. The match amount depended on an algorithm that used the last two digits of the client’s social security number and was not revealed until the client agreed to the scheme. In this way, the tax professionals’ decisions to offer (or skip) the IRA screen on the software was independent of treatment status.
Experimental Design Details
Randomization Method
Random assignment was based on an algorithm that used the last two digits of the Social Security number of the primary filer.
Randomization Unit
Individual client
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
Study not clustered
Sample size: planned number of observations
13,962 clients
Sample size (or number of clusters) by treatment arms
Control, 0% match rate: 4,719
Treatment, 20% match rate: 4,521
Treatment, 50% match rate: 4,722
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
IRB Approval Date
IRB Approval Number
Post-Trial
Post Trial Information
Study Withdrawal
Intervention
Is the intervention completed?
Yes
Intervention Completion Date
April 05, 2005, 12:00 AM +00:00
Is data collection complete?
Yes
Data Collection Completion Date
April 05, 2005, 12:00 AM +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
Study not clustered
Was attrition correlated with treatment status?
No
Final Sample Size: Total Number of Observations
13,962 clients
Final Sample Size (or Number of Clusters) by Treatment Arms
Control, 0% match rate: 4,719 Treatment, 20% match rate: 4,521 Treatment, 50% match rate: 4,722
Data Publication
Data Publication
Is public data available?
No
Program Files
Program Files
No
Reports and Papers
Preliminary Reports
Relevant Papers
Abstract
SAVING INCENTIVES FOR LOW AND MIDDLE-INCOME FAMILIES: EVIDENCE FROM A FIELD EXPERIMENT WITH H&R BLOCK

We analyze a randomized experiment in which 14,000 tax filers in H&R Block offices in St. Louis received matches of zero, 20 percent, or 50 percent of IRA contributions. Take-up rates were 3 percent, 8 percent, and 14 percent, respectively. Among contributors, contributions, excluding the match, averaged $765 in the control group and $1100 in the match groups. Taxpayer responses to similar incentives in the Saver’s Credit are much smaller. Taxpayers did not game the experiment by receiving a match and strategically withdrawing funds. Tax professionals significantly influenced contribution choices. These results suggest that both incentives and information affect behavior.
Citation
Duflo, Esther, William Gale, Jeffrey Liebman, Peter Orszag, and Emmanuel Saez. 2006. "Saving Incentives for Low-and Middle-Income Families: Evidence From a Field Experiment with HR Block." The Quarterly Journal of Economics 121(4): 1311-46.