Applying Behavioural Economics to Increase the Take-up of Wage Subsidies

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This report outlines key findings from a successful trial aimed at improving the uptake of wage subsidies through the use of behavioural economics.

The trial was a partnership between the Department of Employment (now the Department of Jobs and Small Business), the Behavioural Insights Team and the jobactive provider Mission Providence and tested a variety of methods (or interventions) to increase uptake. The trial ran from July 2016 to October 2016.

The interventions were informed by key behavioural economics principles and were evaluated using a randomised control methodology. The interventions did not vary the overall financial parameters of the program and could be scalable at low cost. The changes focused on:

  • using simpler and more accessible language in documentation provided to employers (e.g. the wage subsidy agreement, promotional flyers and correspondence);
  • moving the wage subsidy agreement online;
  • front-loading payment instalments; and
  • giving staff access to a user-friendly payment calculator.

Feedback received during the trial fine-tuned the final design and implementation of the operational policy changes to wage subsidies announced in the 2016 Budget and implemented nationally on 1 January 2017.

Read the Applying Behavioural Economics to Increase the Take-up of Wage Subsidies Report.