Transaction Costs and the Take-Up of Social Safety Net Programs: Evidence From the Combined Application Project

Abstract

This paper studies the effect of transaction costs on the take-up and targeting of social safety net programs in the context of multi-program enrollment by exploiting the Combined Application Project (CAP), a widespread state-level policy designed to encourage enrollment in the Supplemental Nutrition Assistance Program (SNAP) among elderly recipients of Supplemental Security Income. I show that the CAP increased SNAP take-up by 8–13 percentage points, or about 17%–24%. The increase was suggestively larger among those with a higher probability of being food insecure. Exploiting heterogeneity in the format of the CAP across states, I find that “auto-enrollment” most effectively increased SNAP take-up.