Awareness, Costs, and Take-up of Social Benefits: Evidence from a Field Experiment in China

Abstract This study examines incomplete participation in social benefit programs by focusing on individual income tax refund claims in China. Despite growing evidence on this issue, there remains a need to directly compare the effectiveness of addressing behavioral barriers versus alleviating administrative burdens in promoting program take-up. Moreover, when administrative burdens are targeted, it is unclear whether reducing learning, compliance, or psychological costs is most effective. To address these questions, we investigate how policy interventions designed to enhance program awareness and reduce participation costs affect individuals’ tax refund take-up. In collaboration with a local taxation bureau in China, we conducted a randomized field experiment involving approximately 23,000 eligible taxpayers assigned to different intervention groups. Using administrative data, we tracked their tax refund filing activities during the settlement period. Results show that awareness-enhancing interventions increased take-up by 2.19 percentage points, whereas cost-reduction efforts yielded limited or unintended negative effects.