Take-Up

Abstract

Why are take-up rates incomplete or low when opportunities are unambiguously advantageous to people who are eligible for them? How can public officials promote higher take-up of opportunity? All over the world, these are challenges of the first order. There are three primary barriers to take-up: learning, compliance, and psychological costs. These costs lower the net expected benefit of opportunities, and reduce participation in otherwise advantageous programs. Fully rational agents would consider these costs in their take-up decisions, and in light of behavioral biases, such costs loom especially large and may seem prohibitive. Experimental and other evidence suggest methods for reducing the barriers to take-up and the effects of behavioral biases. Use of such methods would significantly increase access to a wide range of opportunities that would increase individual well-being and social welfare.

Keywords: Take-up, microeconomics, consumer theory, behavioral economics, behavioral science

JEL Classification: D11, D90, D91