Can a Letter Close the Benefit Take-Up Gap? Evidence from a Swiss Policy Reform

• In Event: Factors Associated with Administrative Burdens and Their Relief

Abstract

Across OECD countries, a high share of individuals eligible for means-tested social benefits do not receive the support they are legally entitled to (Dubois, 2014). Reducing these take-up gaps is a pressing policy challenge, yet it remains unclear which barriers matter most. The administrative burden framework points to learning costs as a key upstream barrier: if individuals are simply unaware of a benefit or uncertain about their eligibility, they never enter the application process at all. This raises a direct policy question: does proactive informational outreach increase take-up of means-tested benefits, and if so, through which channels?

This paper provides one of the first quasi-experimental tests of this question outside the United States. The empirical context is a 2025 reform in the Swiss canton of Basel-Stadt, where retired individuals identified as potentially eligible for supplementary benefits received personalized informational letters based on their tax records. Supplementary benefits provide assistance in cases where the pensions and income do not cover the minimum living costs. The letter informs recipients about the program and their potential entitlement, and additionally offers a voluntary referral to Pro Senectute, an advisory organization that can provide support during the application process. Importantly, the intervention does not simplify any application procedures or reduce documentation requirements. Switzerland offers a particularly informative setting: it combines high administrative capacity, strong formal entitlements, a comparatively low-stigma benefit program, but still documents non-take-up rates of approximately 29 percent. Persistent access barriers under these favorable conditions point to constraints that extend well beyond weak institutions or resource scarcity.

The sendout of informational letters follows a staggered rollout in successive batches of approximately 400 recipients, generating plausibly exogenous variation in the timing of information exposure. I exploit this using a staggered difference-in-differences design (Callaway & Sant'Anna, 2021). I use individual-level administrative data that stems from an exclusive research collaboration with the cantonal Social Welfare Office and includes data on initial contact, duration of application and decision about benefit receipt. It also includes key sociodemographic characteristics enabling subgroup analyses by age, gender, and income category.

Preliminary results from the first 1,500 letters sent show that only around 80 individuals subsequently registered with the welfare office, a response rate consistent with comparable informational interventions in the literature. Notably, only 3 respondents made use of the Pro Senectute referral. This suggests that those who respond to outreach engage directly with the administration rather than seeking intermediary support, pointing to compliance and psychological costs as potentially more binding constraints for non-respondents.

My findings have direct implications for policy design. If informational outreach alone moves only a fraction of eligible non-claimants, governments seeking to close take-up gaps may need to invest in reducing compliance and psychological burdens such as stigma rather than awareness campaigns. This study contributes timely evidence to an ongoing policy debate at both national and European levels about how welfare administrations can most effectively reach those who need support.

Author

• Philipp Scherer, University of Zurich
  Presenting Author