Intervention(s)
The causal parameter we will estimate is the effect of providing information about a VAT rebate for beneficiaries of a conditional cash transfer on the take-up of this rebate (see below for a description of the CCT program). The parameter should have a positive sign: exposure to information about the rebate should increase take up. Since this is a mechanism experiment, we will attempt to distinguish the underlying causes of non-take-up by implementing a series of sub-treatments and estimating a casual parameter for each of these. Our prior is that simply providing information about the rebate (which the four sub-treatments will do) should increase take-up, so that the four should have about the same effect size. Statistically and economically meaningful differences between the four underlying parameters will guide us in understanding which of the factors at play is more relevant for non-take-up.
Virtually all beneficiaries of the cash transfer go to an ATM to retrieve cash from the benefit. The social security administration, our partner in this project’s implementation, has the ability to display a personalized message for each beneficiary when they insert their debit card in the ATM. We will use this device, as well as SMS messages, to convey a series of short messages about the VAT rebate program.
The main outcome of interest is the take up of the VAT rebate benefit – i.e., whether beneficiaries use the debit card to purchase goods (the condition to receive the rebate in their account) instead of simply withdrawing cash from their account and using the cash to make purchases. The social security administration has monthly records of which beneficiaries used the program, since it has to deposit the amount of the rebate in each beneficiary’s bank account. This is how we will measure our main outcome of interest: a binary variable indicating take-up or non-take up of the program the month when the beneficiary received the message about the rebate in the ATM’s screen. The source will be ANSES administrative records. We will also use two additional related secondary outcomes: a) the amount of the rebate received, if at all (since the rebate total depends on the amount of purchases made with the debit card); b) whether the beneficiaries made use of the full amount of the rebate: since the total rebate is higher than what they can spend with the debit card, to take full advantage the beneficiaries should deposit extra funds in their government-provided bank accounts – this was meant to be an additional incentive for financial inclusion. We will as well implement auxiliary surveys to validate the hypotheses, the experimental treatments, and to further refine the identified mechanisms.
The aim of this project is to study the effectiveness of information provision and behavioral nudges to encourage full take-up of program benefits among recipients of the AUH, in particular, the aforementioned VAT rebate. These can only be retrieved (in the form of discounts) if the debit card used to receive the funds is also used to purchase goods. Currently, most recipients only use the debit card to extract funds in cash and never use it to consume, resulting in an incomplete take-up of benefits. Additionally, the maximum claimable tax credit amount is higher than the tax rate applied to the total allowance, which means that in order to benefit from the full tax credit sum, recipients would have to deposit money from other sources and use the debit card to consume in formal establishments.
The intervention will be based on four randomly assigned treatment arms and a control group. Each of the treatment arms will consist of a different ATM screen message designed to capture the four main reason identified for non-take-up of the VAT rebate. They may not use their debit cards and get a rebate because:
• they do not want to be identified as beneficiaries when making purchases (stigma),
• they do not have access to retailers equipped with debit card readers or because prices are higher in these more formal stores (cost/hassle),
• they are unaware of the benefit’s existence (information),
• they fear that the government might use their shopping behavior to reduce future benefits (misperception).
The multi treatment mechanism field experiment will help us distinguish between these alternative explanations and unearth the extent to which the more rational (costs, lack of information), and behavioral (inattention, stigma, misperceptions) factors explain the underperformance of the program. The experiment will guide the reform of the program and future information campaigns to increase take-up and maximize resources for the poor.
The target population of the experiment is comprised of the recipients of the Asignación Universal por Hijo (Universal Child Allowance – AUH) conditional cash transfer. This is one of the most important components of the social safety net currently in place in Argentina. Households receiving this kind of assistance make up the most vulnerable portion of the population in Argentina, where the last available poverty headcount ratio estimation is 25,7 percent, rising to 39,7 percent for children aged 0 to 14 years old. In particular, 84% of children receiving the allowance belong to the two poorest quintiles of the household income distribution and specifically to the first three deciles.
Launched in November 2009, AUH is a massive, non-means-tested conditional cash transfer program currently reaching 3.9 million children in 2.1 million households and representing approximately 7% of total expenditure at the national level (including contributory based family benefits, Ministerio de Hacienda (2017)). The monthly allowance consists of $1.694 Argentinian pesos per child of which beneficiaries only receive 80% every month (roughly 13% of the mean monthly household income of the second decile of the income distribution). In December, at the end of the school year, they receive the total sum corresponding to the remaining 20% transfer accumulated during the year, conditional on fulfillment of a vaccination plan, health check-ups for children under 6 years of age, and certified school year completion for school age children. Money is deposited every month in a savings account in the name of the legal beneficiary, which is the mother of the child in 90% of the cases (ANSES (2017)).
In February 2018, only 248.808 beneficiaries of the AUH program (out of nearly 3.9 million children and their 2.1 million parents/tutors) used their government-provided debit cards to purchase goods and thus received the additional transfer in their bank accounts (the VAT rebate). The total of funds transferred was less than 3% of the actual budget allocated to this program for these beneficiaries.