Using a difference-in-difference control trial to test an intervention aimed at increasing the take-up of a welfare payment in New Zealand

Abstract:This paper describes a difference-in-difference control trial (DDCT) of an intervention designed to increase the take-up of an income support payment in the New Zealand welfare system. The intervention used a microsimulation model to identify potential claimants who were then contacted by either phone, email, or letter. The trial was designed as a DDCT because of ethical concerns associated with a fully randomized approach. The trial provided convincing evidence that the intervention would increase the take-up of the payment and a modified version was then implemented as an ongoing business process by the New Zealand Ministry of Social Development (MSD). The findings from the trial contribute to the literature about how best to increase the take-up of welfare payments. The study also demonstrates the value of using a difference-in-difference control trial.