Attention vs Choice in Welfare Take-Up: What Works for WIC?

Abstract

Incomplete take-up of welfare benefits remains a major policy puzzle. This paper decomposes the causes of incomplete welfare take-up into two mechanisms: inattention, where households do not consider program participation, and active choice, where households consider participation but find it not worthwhile. To capture these two mechanisms, we model households' take-up decision as a two-stage process: attention followed by choice. Applied to NLSY97 data on the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), our model reveals substantial household-level heterogeneity in both attention and choice probabilities. Furthermore, counterfactual simulations predict that choice-nudging policies outperform attention-boosting policies. We test this prediction using data from the WIC2Five pilot program that sent choice-nudging and attention-boosting text messages to different households. Consistent with the counterfactual prediction, choice-nudging messages increased retention much more effectively than attention-boosting messages.