Using Behavioral Economics to Increase On-Time Child Care Subsidy Renewals

By Emily Schmitt, Senior Social Science Research Analyst, Office of Planning, Research and Evaluation & Victoria Kabak, Research Fellow, Office of Planning, Research and Evaluation

In Oklahoma, parents who receive childcare subsidies from the state’s Department of Human Services must periodically submit documentation to prove their continued eligibility for the program. But the state found that only two-thirds of parents submitted renewals by the deadlines, potentially causing parents to lose services and childcare providers to lose funding.

Working with the Oklahoma Department of Human Services, we tested two different approaches informed by behavioral science to increase on-time subsidy renewal.

The first approach focused on parents, sending them:

• An early-alert postcard;
• A redesigned renewal notice; and
• A reminder mailing

The second focused on childcare providers. They received lists of clients whose subsidies were due for renewal and specially designed envelopes to give to parents for collecting the required documents.

The study found that:

• The childcare provider approach by itself increased the percentage of clients who renewed before the deadline by 2.4 percent.
• The parent approach on its own increased the percentage of parents who renewed by the end of a 30-day grace period after the renewal deadline by 2.4 percent. However, it did not increase the percentage of clients who renewed before the deadline.
• Combining the approaches did not produce results that were statistically different from those of the childcare provider or parent approaches on their own.

The results of this research suggest that behavioral interventions can have substantial impacts not only on program participants but also on program staff, in ways that improve outcomes for both families and providers.

This new research comes out of our BIAS project with MDRC , the first major opportunity to apply behavioral economics to programs that serve poor and vulnerable families in the United States. BIAS works with state and local partner agencies to design and test behavioral interventions in human services programs.