Engaging Providers and Clients
Using Behavioral Economics to Increase On-Time Child Care Subsidy Renewals
The Behavioral Interventions to Advance Self-Sufficiency (BIAS) project is the first major opportunity to use a behavioral economics lens to examine programs that serve poor and vulnerable families in the United States. Sponsored by the Office of Planning, Research and Evaluation of the Administration for Children and Families in the U.S. Department of Health and Human Services, and led by MDRC, the project applies behavioral insights to social service programs and policies to learn how behavioral science can be used to deliver programs more effectively and improve the well-being of low-income children, adults, and families.
This report presents findings from a study designed in partnership with the Oklahoma Department of Human Services (DHS) to increase the number of clients who renew their child care subsidy on time. Only about one-third of an estimated 39,000 child care subsidy cases that are eligible for renewal each year in Oklahoma are renewed by the state’s deadline. If a client fails to renew on time, DHS ceases payments to providers on behalf of the client. Providers can then require their clients to pay the amount of the subsidy in addition to any copayments. If clients do not pay the full cost of child care, providers may temporarily withhold services or clients may lose their place in the child care facility. On-time renewals, therefore, ensure consistent child care for families, stable payment for providers, and a reduced administrative burden for DHS.
The BIAS team diagnosed factors that might inhibit on-time renewal and designed three interventions for improvement: (1) a “provider intervention,” which gave child care providers more information about their clients’ renewal deadlines and prompted them to send reminders about and help clients with renewal; (2) a “client intervention,” which used early and clear communication to clarify the renewal process and continued follow-up communication; and (3) a “combined intervention,” which included both the client and provider interventions.
The interventions were tested in a randomized controlled trial including more than 9,000 clients who were randomly assigned to a client-only group (clients who received the client intervention but whose providers did not receive the provider intervention); a provider-only group (clients who did not receive the client intervention but whose providers received the provider intervention); a combined intervention group (clients who received the client intervention and whose providers received the provider intervention); and a control group (clients who were not exposed to any intervention on either the client or provider side).
The evidence suggests that the provider intervention helped clients renew on time, at an estimated cost of $1.10 per provider per month, or approximately $29,724 per year if extended to all providers in Oklahoma.
The client intervention, which cost about $1.00 per client, did not appear to improve on-time renewal, but it may have helped clients renew by the end of a 30-day grace period following the renewal deadline.
Combining the client and provider interventions did not appear to be more effective than either intervention alone.
These findings suggest that behavioral strategies designed for staff who work directly with clients may be a fruitful area for future research.