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The Persuasive Role of Information: The Case of EITC Reminding Letters by Mail

Journal of Public Policy and Administration, (published Online), 30(2), 115-144, April 2015

28 Pages Posted: 23 Oct 2013 Last revised: 20 Jul 2016

Michel Strawczynski

Hebrew University of Jerusalem; Hebrew University of Jerusalem - Dept. of Economics and School of Public Policy

Natalia Mironychev

Israel Tax Authority

Date Written: October 22, 2013

Abstract

This paper uses data on Earned Income Tax Credit (EITC) reminding letters sent by the Israel Tax Authority to potentially eligible applicants during the period 2008-2011. Using a setup of repeated letters sent to the applicants, we are able to identify whether individuals apply for receiving the EITC as a reaction to the reminding letter. In the framework of a dynamic analysis of learning, we estimate the persuasive role of information at 1.5 percent. Using independently performed questionnaires, we are also able to characterize the "letter dependent" population, defined as the applicants that depend on receiving letters for requiring the EITC transfer. We found that these applicants are older, they receive a lower transfer, they have a fair knowledge about the program, and they do not actively seek for information on the expected EITC transfer amount. We also found that they have particular cultural characteristics: the representation of ultraorthodox applicants is higher than their percent in the population, they have problems with fluency in languages including Hebrew and the percent of households with two earners is low.

Keywords: EITC, Reminding letters, Information

JEL Classification: H53, H83

Suggested Citation

Strawczynski, Michel and Mironychev, Natalia, The Persuasive Role of Information: The Case of EITC Reminding Letters by Mail (October 22, 2013). Journal of Public Policy and Administration, (published Online), 30(2), 115-144, April 2015. Available at SSRN: https://ssrn.com/abstract=2343838 or http://dx.doi.org/10.2139/ssrn.2343838

Michel Strawczynski (Contact Author)

Hebrew University of Jerusalem ( email )

Mount Scopus
Jerusalem, 91905
Israel
972-2-5882692 (Phone)

Hebrew University of Jerusalem - Dept. of Economics and School of Public Policy

Mount Scopus
Jerusalem
Israel

Natalia Mironychev

Israel Tax Authority ( email )

Jerusalem
Israel

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