There is no conflict of interest.
Citation
Zhang, C. Y., Hemmeter, J., Kessler, J. B., Metcalfe, R. D., & Weathers, R. (2020). Nudging Timely Wage Reporting: Field Experimental Evidence from the United States Social Supplementary Income Program (No. w27875). National Bureau of Economic Research.
Highlights
- The study's objective was to examine the impact of reminder letters on compliance behavior.
- The study was a randomized controlled trial that assigned Supplemental Security Income (SSI) recipients to one of four treatment groups or a control group. Using administrative records, the authors conducted statistical models to compare the outcomes of the treatment and control groups.
- The study found a significant relationship between receiving a reminder letter and an increased likelihood of reporting any countable earnings and the amount of countable earnings reported three months post-intervention.
- This study receives a high evidence rating. This means we are confident that the estimated effects are attributable to the reminder letters, and not to other factors.
Features of the Study
The study was a randomized controlled trial that examined the impact of reminder letters on compliance with wage reporting requirements. The U.S. Social Security Administration (SSA) sent reminder letters to SSI recipients, encouraging timely and accurate reporting of earnings to reduce improper payments. The authors selected a sample of 50,000 SSI recipients from a target population of 240,000 based on criteria such as age, language, and SSI payment status.
The study participants were randomized to receive one of five conditions, one of four treatment groups or a control group. Treatment group 1 received a letter reminding them to report any earnings that could change their SSI payments (basic information). Treatment group 2 received the basic information letter with additional details about the overall reporting behavior of other SSI recipients (social information). Treatment group 3 received the basic information letter with additional details on the potential financial penalties for not reporting wages (information on penalties). Treatment group 4 received the basic information letter with both the social information and information on penalties. The control group did not receive a reminder letter. The study tracked wage reporting compliance using administrative data from the Supplemental Security Record (SSR) master file, which includes detailed demographic and program participation information. The authors used statistical models with control variables to compare the outcomes of the treatment and control groups.
Findings
Compliance
- The study found that receiving a reminder letter significantly increased the likelihood of SSI recipients reporting any countable earnings in the three months following receipt of the letter. No significant differences were found at the end of the year.
- The study also found a significant relationship between receipt of a reminder letter and the amount of countable earnings reported in the three months following receipt of the letter. No significant relationship was found at the end of the year.
- The study did not find any significant differences in outcomes based on the type of letters received.
Considerations for Interpreting the Findings
The study reports a less stringent statistical significance level, considering p-values of less than 0.10 to be significant, though it is standard practice to consider statistical significance if the p-value is less than 0.05. Only results that demonstrate a p-value of less than 0.05 are considered statistically significant in this profile.
Causal Evidence Rating
The quality of causal evidence presented in this report is high because it was based on a well-implemented randomized controlled trial. This means we are confident that the estimated effects are attributable to the reminder letters, and not to other factors.