Abstract:

While the cost estimates of reminders by mail are readily available for policy-makers, the estimation of their benefit requires thoughtful analysis. For this purpose, we used data about Earned Income Tax Credit (EITC) reminders by mail which the Israel Tax Authority sent to eligible applicants during the period of 2008-2011. Using a framework of repeated letters, we were able to identify those who applied for the EITC in response to such a reminder. In the framework of dynamic analysis of learning, we estimated the persuasive role of receiving reminders – which prompts an increased uptake – at 1.5 percent. Using independently -performed questionnaires, we characterised the ‘letter–dependent’ population, defined as those who depended on receiving reminders for requesting the EITC transfer. We found that these applicants were older; they received a lower transfer, they had a fair level of knowledge of the programme and they did not actively seek out information about the amount of the expected transfer.