Too complicated, too confusing: why more small businesses aren’t applying for coronavirus relief loans, and what we can do to reach them

Many individuals may not access the critical social benefits, such as the EITC, that they are eligible for during this time. The 2019 tax filing deadline extension from April 15th to July 15th due to COVID-19 gives states an opportunity to encourage individuals who could be eligible for the EITC to file their taxes.

A randomized evaluation from Day Manoli and Saurabh Bhargava, in partnership with the US Internal Revenue Service tested the effectiveness of different messages to taxpayers who were eligible for, but did not claim, the Earned Income Tax Credit and found that targeted messages increased take-up of the EITC.

Social benefit programs like SNAP and TANF are also crucial for vulnerable families and individuals, particularly during economic downturns. Yet millions of SNAP-eligible households do not enroll and miss out on assistance that can help address food insecurity. A randomized evaluation from researchers Amy Finkelstein and Matt Notowididgo, in partnership with Benefits Data Trust, found that sending eligible households informational mailings nearly doubled SNAP enrollment, while combining these informational mailings with application assistance tripled enrollment.

It is worth noting that sometimes text messages and/or letters alone are not enough to increase take-up of social insurance programs and tax credits. A recent evaluation by the California Policy Lab found that text messages and letters alone were not enough to increase the take-up of the state and federal EITCs. If possible, states should simplify enrollment processes while also providing targeted outreach to increase take-up of social insurance and tax credits.

• Recommendation: State and local governments can implement mailings or text messages that provide relevant program information for those who may be eligible for benefits, provide assistance, and simplify application processes to increase the likelihood of eligible participants claiming benefits.  
• For consideration: States can streamline enrollment for programs like SNAP, TANF, and Unemployment Insurance by implementing presumptive enrollment, or the ability to enroll those who appear eligible, rather than requiring a full application. This mechanism can ease administrative barriers and provide expedited support to those who need it.

In response to the coronavirus pandemic, several states have extended or re-opened the enrollment period for health insurance on state health insurance exchanges. However, despite insurance being available, many eligible Americans remain uninsured. People who are uninsured will likely face barriers to accessing testing and treatment for COVID-19 symptoms.  In an effort to mitigate the costs of seeking COVID-19 testing and treatment, the CARES Act expanded the number of tests and services insurers must cover at no cost. However, there are gaps in these protections that may expose patients to unexpected medical bills, and insurance can help mitigate these costs. Experts found that informational interventions improved take-up of plans.

• Recommendation: Letters advertising enrollment deadlines and personalized information such as projected subsidies and plan ratings can increase take-up of insurance, even among healthier individuals. Increased take-up of health insurance will not only allow more Americans to access and pay for healthcare, but also decrease insurance costs in the long-run. The evidence also suggests that simplifying enrollment processes—such as through reminder emails with easy links to enrollment or auto-enrollment—could increase enrollment, more than through subsidies alone.
• For consideration: Under the National Emergencies Act, states have been granted the option to expand Medicaid coverage and reduce barriers to enrollment by applying for Medicaid Disaster Relief State Plan Amendments. One strategy to streamline enrollment is to implement presumptive eligibility, thus allowing hospitals, clinics, and other entities to screen individuals for Medicaid eligibility, and to temporarily enroll those who appear eligible.

Lack of insurance coverage during a global pandemic will cause even greater financial strain on low-income populations. Despite access to free or significantly subsidized health insurance through the Medicaid program, many eligible individuals and families remain unenrolled. A study of low-cost improvements to outreach efforts to Medicaid-eligible residents found these nudges to be particularly effective among hard-to-reach vulnerable populations. It was especially beneficial if outreach efforts were coordinated for times of the month when low-income populations were likely to be responsive.

• Recommendation: Behaviorally-informed nudges with specific next steps, such as postcards, emails, and automated calls reminding people of upcoming deadlines, can increase enrollment in the Medicaid program. Given that many states have authorized shelter-in-place and other stay-at-home orders, letters and other forms of electronic or phone communication will be critical to remind residents of key deadlines and key steps for securing Medicaid coverage.

Under shelter-in-place and other orders to stay home, students will likely receive classroom instruction and any supplemental exercises online. Effective CAL programs that have been rigorously evaluated share a few common features. Students can advance through exercises at their own pace, allowing them to work incrementally until they have mastered the material. Evidence suggests that simply watching videos is insufficient, no matter how stimulating the content. School leaders should provide educators with guidance on monitoring and rewarding progress for advancing through instructional videos.

• Recommendation: Educational software that adapts instruction to meet student needs or that offers timely feedback to students and reports data on student performance to teachers can support teacher instruction at this time. For example, ASSISTments, a free online math homework platform that offers students feedback as they solve problems, has been evaluated through multiple randomized evaluations and shown to have positive results even when students used the program for less than an average of ten minutes per night, three to four nights per week.

Students in online only courses tend to perform worse than students in in-person-only courses. Studies of Massive Open Online Courses (MOOCs) show that persistence is low and few students get past the first few lessons. It is possible that students taking online courses may struggle with the lack of accountability or miss out on motivating relationships with instructors and peers.

• Recommendation: Engage students in video and online learning by creating assignments that ask students to engage with material and share their reactions through online discussions to increase the likelihood that students process the material.

Evidence-based education non-profits, including Saga Education, are now delivering their tutoring model virtually to support at-home learning. Saga Education partners with public school districts to provide personalized tutoring during the school day for students who are falling behind. Randomized evaluations of Saga’s model have shown that the program results in large academic gains for students. Saga is offering virtual tutoring services to students in New York City while schools are closed. While this online implementation has not been evaluated, our assessments of SAGA’s approach and evaluations of tutoring-style programs delivered virtually suggest that these supports could be valuable to students who are struggling academically.

• Recommendation: Tutoring programs offering two-to-one support can help students get back on track when schools reopen and will help fight the widening of the achievement gap that is likely to result from school closures.
• For consideration: Evaluations of summer youth employment programs have found these programs offer considerable promise to alleviate the social costs of youth violence. Several cities have been forced to cancel these programs due to COVID-19. While no formal evaluation has been done on the topic, districts might consider partnering with summer youth employment programs to offer youth jobs as virtual two-to-one tutors for younger students needing remedial support during the summer months. For more on summer youth employment programs, see J-PAL North America’s Policy Bulletin: Stopping a Bullet with A Summer Job.

Evidence suggests that with short, actionable directions and suggestions for engaging activities, parents are better equipped to support learning at home. Evidence-based family engagement apps are a proven method of providing parents with these behavioral nudges. There is also evidence that suggests timely and specific reminders, like text message reminders about tasks required for matriculation can help students enroll in college at higher rates. Behavioral nudges delivered through text messages may be an inexpensive way for districts to support both parents and students during school closures.

• Recommendation: Districts can adapt learnings from behavioral science and develop timely, actionable text messages for parents to encourage and support their students while learning at home.

Simply urging people to change behavior usually does not work. This insight comes from a number of studies from around the world, focused on a number of health topics.² For instance, providing health insurance consumers in the United States with specific and personalized price information on the cost of prescriptions increased the likelihood of consumers switching plans and decreased annual consumer costs (Kling et al. 2012).

• Recommendation: Specific and actionable information campaigns to encourage key preventive behaviors for COVID-19 may be particularly effective. Experts may find it beneficial to continue issuing specific information on what behaviors to take up and why these actions are important. For example, advice to systematically wash hands upon returning from the grocery store or to set an alarm to remember to wash hands every 2 hours may be more effective than more general exhortation to “wash hands regularly.” Likewise, encouragement to replace handshakes with head nods or elbow bumps may be more actionable than simply telling individuals to avoid handshakes.

While top-down messaging that is framed in a specific and actionable way can change behavior, leveraging the community is also important for sustained behavior change.³ For example, a study in Nepal found that high school girls whose friends received a menstrual cup were more likely to adopt them as well (Thornton and Oster, 2008). Two experiments from India demonstrated that highly central individuals in a community may be particularly effective at spreading important information and that community members are able to identify such individuals quite reliably (Banerjee et al. 2019). In rural Peru, a large-scale handwashing intervention in 2010 involving a mass media campaign (radio, posters, and promotional events) alongside a community-based training improved knowledge and modified behaviors, while mass media alone had no impact. The campaign led to more households correctly identifying that water and soap was the best way of washing hands and increased the number of people washing their hands before eating (Galiani et al 2015; Galiani et al. 2012).

• Recommendation: Directly leveraging the influence of well-connected community members and peers (while avoiding face-to-face interactions) may help to spread accurate information on new recommendations. While guidelines on social distancing make in-person interactions difficult, online and mobile platforms may be good ways to leverage this influence.

Television, radio, or other entertainment platforms can be used to change attitudes and behaviors by embedding educational messages in a bigger storyline.⁴ In Nigeria, for example, the edutainment television series MTV Shuga improved knowledge and attitudes towards HIV and risky sexual behavior and increased the likelihood of getting tested for HIV (Banerjee et al. 2019). Effects were stronger for viewers who reported being more involved with the story or identified with the characters.

• Recommendation: Where possible, incorporating key public health messages on social distancing and hand washing into new or existing entertainment media could help improve adherence to recommended behaviors. The increased time spent at home due to COVID-19 lockdown orders and the ability to identify with characters facing similar changes to their personal life may further underscore edutainment’s potential to influence individual behavior. Edutainment may be difficult to produce under social distancing practices; however, animation or other art could potentially ease some of these concerns.

In Indonesia, a study leveraging Twitter found that celebrity endorsement significantly increased the likelihood that a tweet promoting immunization was liked or retweeted relative to similar tweets without celebrity endorsement. The effect was particularly large when celebrities were seen as speaking in their own voice, rather than citing external sources. By contrast, explicitly citing sources in the tweets actually reduced diffusion (Alatas et al 2020).

• Recommendation: Educating celebrities early on in an epidemic and leveraging their voices can help to avoid the spread of misinformation or the undermining of public health campaigns. Depending on the content and accuracy of their message, all individuals with a media following can have a positive or negative impact on public opinion and behavior. Celebrity influence may continue to be important for raising the profile of COVID-19 in the medium-term, when the current level of awareness has subsided but preventive measures are still important. Note that, to date, this recommendation is based on a single study rather than a broader body of research.

Since the COVID-19 pandemic is a health crisis accompanied by a severe economic one, cash transfers can provide income support and potentially increase uptake of healthy behaviors.

A review of the literature shows that offering conditional cash transfers (CCTs) that require households to meet certain conditions on healthy behavior generally increases adoption of targeted behaviors.⁵ In some cases, making households aware of the importance of such behaviors and implying that the transfer should be used for them, without strong enforcement of conditions, also contributed to the increase in health service utilization.

Providing cash with no conditions, or unconditional cash transfers (UCTs), increases spending on household priorities and often improves overall household well-being. However, improved health outcomes are difficult to detect unless the cash transfer is very large.

• Recommendation: Cash transfers can be leveraged to increase uptake of healthy behaviors. Both UCTs and CCTs have costs associated with determining eligibility, targeting the transfer to intended households, and delivering the cash. Additionally, the conditions in a CCT can be soft (unenforced) or hard (enforced), or the transfer can also be unconditional but accompanied by specific, actionable information. When determining which type of transfer to implement, policymakers may consider the outcome(s) they are hoping to achieve, as well as the relative costs and benefits of each type of transfer across all target outcomes. A CCT with hard conditions has additional costs associated with monitoring which households are adhering to the conditions, which vary based on the design and strictness of the conditions, as well as on local capacity for monitoring and enforcing the conditions. If implementing a CCT, it will be important to determine what desired behaviors would be conditioned and whether monitoring take-up of these behaviors is feasible, or whether to rely on soft conditions or information provision instead. For instance, a hard condition may be possible if focused on testing for COVID-19, but a soft condition or information provision may be preferred if the priority is ensuring adherence to a lockdown or shelter-in-place policy.

A study in Sierra Leone found during the 2014-16 Ebola crisis that community monitoring of government-run health clinics and status awards for clinic staff (both implemented roughly two years prior to the Ebola health crisis) improved the community's perception of health care quality, utilization of health services, and Ebola-related health outcomes. During the crisis, the interventions increased Ebola testing rates and reduced mortality among patients, driven by improvements in the community monitoring intervention (Christensen et al. 2020). A study from the United States similarly showed the importance of trust in the health care system: black men, typically more mistrustful of the health care system, were more likely to trust providers of the same race. Seeing doctors they trusted increased their preventive health care utilization rate, including receiving the seasonal flu vaccine (Alsan et al. 2019).

• Recommendation: Programs or policies that increase trust in the health system could improve reporting and cooperation with health guidelines, which in turn could help increase testing, reduce the spread of the disease, and reduce mortality. In the study from Sierra Leone, the social accountability intervention had been implemented prior to the Ebola health crisis. Still, interventions that increase trust may be most impactful in areas with low baseline utilization of health care services or amongst populations with low levels of trust in the health system (including marginalized groups that may include migrants, LGBTQ individuals, indigenous communities, or racial minorities depending on the context). Additional trust-building policies, such as ensuring patient confidentiality with regard to immigration status, could also help address wariness of the formal health system. Such measures would most likely improve the resiliency of the health systems over time; they may also possibly improve outcomes if implemented during or right before a major health shock, though this has not been studied to date. Note that, to date, this recommendation is based on two studies rather than a broader body of research.

Uptake of preventive health products, such as vaccines, is highly sensitive to price. A large body of evidence shows that take-up reduces dramatically even with small price increases, and especially so for products with large social externalities.⁶ For example, when a program in Kenya moved from free provision of deworming tablets to charging US$0.30 per child, take-up fell from 75 percent to 18 percent (Kremer and Miguel 2007). Furthermore, preventive products distributed for free have generally been put to good use.

• Recommendation: When feasible, subsidizing recommended preventive health products and eliminating user fees can increase uptake. There is currently a severe shortage of preventive products such as protective masks and COVID-19 tests, and a COVID-19 vaccine is not yet available. Once these supply-side issues have been addressed, providing these recommended products for free to the target population can ensure immediate, mass uptake.