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Prisoners in Texas

With the intent of helping their long-term financial security, prisoners in Texas who were parents were subtly induced to enroll in a program that reduces their childcare support payments while incarcerated.

Marjorie Kamys Cotera/Bob Daemmrich Photography/Alamy

Subtle psychological manipulations help people make smarter financial decisions

Over the past 5 years, on behalf of state governments, nearly 100,000 Americans were gently manipulated by a team of social scientists. In 15 randomized, controlled trials, people in need of social services either encountered the standard application process or received a psychological nudge, in which the information was presented slightly differently—a postcard reminded them of deadlines, for example, or one choice was made easier than another. In 11 of the trials, the nudge modestly increased a person’s response rate or influenced them to make financially smarter choices.

The results, to be presented tomorrow at the annual meeting of the Association for Psychological Science in Chicago, Illinois, add to the growing evidence that nudges developed by psychologists can make a real difference in the success of government programs. “These interventions have positive effects,” says Sim Sitkin, director of the Behavioral Science & Policy Center at Duke University in Durham, North Carolina, who was not involved with the nudge trials. “They should be applied now.”

The idea of influencing people’s choices by making subtle changes to the available information or context of their decisions has been around for generations. After all, what are the advertising and marketing industries if not nudges paid for by businesses? But rigorous academic research on public interest nudges is relatively new, says Caitlin Anzelone, a behavioral scientist based at the New York City offices of the Manpower Demonstration Research Corporation (MDRC), a social policy research organization created by the U.S. government in 1974.

MDRC launched the social service nudge trials in 2010 with funding from the U.S. Department of Health and Human Services. “To some extent we’re reinventing the wheel for a new purpose,” says Anzelone, who oversaw the effort. But rather than influencing people to buy a product, MDRC’s aim is to nudge them into choices that lead to positive outcomes for their health, family, and finances.

MDRC’s trials took place in seven U.S. states and focused on everything from tax credits and welfare for needy families to child support programs. For example, Texas has a program to help alleviate the financial disasters that can develop when a parent is incarcerated. Without income, prisoners often face mounting debt as child support bills rack up, with knock-on effects that can drag the entire family deeper into poverty. The state allows child support payments to be lowered during a prison term, but the incarcerated parent has to actually apply for the modification—and most fail to take advantage of this option.

To see whether the complexity of the application process is the bottleneck, one of MDRC’s trials randomly assigned 2000 Texas inmates with children either to a control group or to be nudged. The latter received postcards reminding them about the program, as well as an application form that came prefilled with personal information. Those who received the reminders and the simplified application were 11% more likely to take advantage of the child support modification option.

Most of the other MDRC nudges also worked, boosting the odds that the person would make a choice that seemed to be in their interest. The other interventions generally had smaller effects, however, shifting the frequency of a decision by 2% to 3%.

“Given the simplicity and the relatively low costs of the interventions, these [results] are impressive,” says Dilip Soman, a behavioral scientist at the University of Toronto in Canada. In the case of the Texas inmate program, for example, MDRC estimates that the intervention costs an extra $1.73 per person per month, and at that price even a small effect is worthwhile. According to Sitkin, “we tend to too readily dismiss small effect sizes.” However, “multiple small interventions can accumulate,” he says, adding up to a large impact.

To some, government nudges suggest mind control. In 2010, when the U.K. government launched its Behavioural Insights Team—dubbed the Nudge Unit by many—conservative bloggers railed against it as a tool for a “nanny state” that trampled on people’s free will. But other governments have followed the U.K. example, Soman notes. The White House now has its own nudge unit—the Social and Behavioral Sciences Team (SBST)—and the Canadian government has similar groups conducting research at the provincial level. “[Governments] are warming up to the idea of using behavioral insights in program delivery and design,” he says.

What’s next for the science of nudges? Behavioral scientist Crystal Hall of the University of Washington, Seattle, a member of the White House’s SBST, suggests it’s time “for researchers and practitioners to think more about moving beyond client-focused interventions.” Rather than just aiming at citizens, nudges could be tailored to the frontline social services staff who interact with them, she says. For example, the state could remind officials at child care centers to notify parents of deadlines they must meet to keep their kids enrolled.

“There is still a lot left to understand in terms of the nuance of nudges,” Sitkin says, but he hopes that won’t slow down their application by policymakers. Several states, having seen MDRC’s results, have already made their nudge permanent. “If we find an intervention with a positive effect, why not use it? And in the meantime, we can continue studying it,” Sitkin says.