It has taken much too long for poverty researchers and program analysts to incorporate the insights of behavioral economists into their research and policy designs.

We know enough to launch high-intensity interventions that could change the choice architecture of safety net programs to better reflect what we have learned about the decision making of the poor.

At least for the last three decades, program rules and procedures have been designed to target benefits to the “truly needy” among the eligible population. As a result, government agencies have “opt-in” rather than “opt-out” rules, that discourage some eligible families from receiving benefits. This strategy neglects the research demonstrating that the experience of poverty affects decision making negatively and likely prevents the poor from claiming all the benefits to which they are entitled.

The current system is much more focused on reducing the number of “false positive” cases wherein ineligible individuals receive benefits than it is on reducing the number of “false negative” cases wherein those who are eligible fail to receive benefits because, for example, they miss appointments, do not complete paperwork, or cannot meet other administrative requirements. Given current program rules and agency procedures, the BIAS results document that the well-being of the poor could be modestly improved if the kinds of interventions conducted here were implemented on a much broader scale.

Read the full article by  Sheldon Danziger at MDRC