Priming parents with their newborn child to encourage CSA engagement

Background

While cities like San Francisco and St. Louis offer their own CSA’s to their residents, most families have access to CSA’s that are offered through state agencies. A majority of states now offer CSA’s, and several have even begun to offer universal accounts to all children born in the state.

In 2018, the Pennsylvania Treasury launched Keystone Scholars program, which began by offering all parents of newborn babies in six eligible counties the opportunity to claim a $100 grant within the year after their child is born. However, not everyone claims the $100 and, by not doing so, they forgo the benefits of the account. We partnered with the PA Treasury to increase the number of mailer open rates, and thus, the number of families that go online to claim their $100 grants.

Key Insights

Currently, the PA Treasury sends mailers to new parents that communicate the benefits of the pilot program and provide information about how parents can claim the $100 grant. To better understand this process, we began by talking with PA Treasury staff and mapping out all of the necessary steps required of parents to claim their account. We also spoke with new parents to understand the barriers that make it less likely they will open and act on the mailer.

• Responses to direct mail are already very low. People tend to overlook letters, and even when they do open their mail, they may put off responding until a later date.

• The experience of parenthood is, in itself, a big barrier for people opening the account. Being a new parent is a very busy time and we tend to let a lot of things fall to the wayside. New parents are likely not opening mailers they are receiving a few months after their baby is born.

Experiment

Experiment 1: Mailers

We hypothesized that addressing the mailer to the parent’s newborn child rather than to the parent would draw more attention to the mailer. By capturing more of parents’ attention, we hoped to increase the likelihood that they would open the letter and, ultimately, motivate them to claim their child’s account. We ran two experiments testing our hypothesis. In the first experiment, we targeted new parents who had not yet claimed the $100 grant nor opened the account. Parents randomly received one of two letters: addressed to them or addressed to their child.

Experiment 2: Emails

In a second experiment, we targeted parents who had already claimed their $100 Keystone grant but had not yet opened a PA 529 college savings account. Instead of direct mail, in this experiment, we tested different email subject lines in an attempt to elicit attention. Parents were randomly assigned to receive one of two emails using the same ideas as the letters: one email’s subject line referenced the name of the parent’s newborn, whereas the other subject line referenced the parents.

Results

Results 1

Letters were sent to 4,343 individuals and a total of 503 claimed accounts across conditions. We found that individuals who received a letter addressed to their newborn were slightly more likely to claim their account compared to individuals who received a letter addressed to the parent. However, these differences were not statistically significant after controlling for the demographics of the parent.

Specifically, we find parents who have completed college or a professional degree, who are married, and who are white are more likely to claim the account. These correlations suggest that claiming may be associated with the parents’ own background and educational history.

Results 2

Of the 435 individuals that received emails, only 20 parents – 7 parents in the parent name condition and 13 parents in the baby name condition – opened a 529 account. This difference is not significant.

When looking just at email open rates, we do see a larger portion of individuals in the condition addressed to the parent’s name opened the email compared to the portion of individuals in the condition addressed to the baby’s name (61% to 47%). While interesting to pursue further, this difference is not statistically significant.

Both the email and mailer experiment suggest that getting parents' attention is not enough to motivate them to either claim the Keystone grant or open a 529 - both complex financial behaviors. Moving forward we hope to pursue more structural changes that might make these benefits an easier choice for parents. For instance, this could include bundling the 529 or Keystone grant with the packet of documents that every new parent interacts with after their child is born.