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Britain’s Ministry of Nudges

The underemployed: More than 17 percent of the U.S. employed are part of the part-time economy.
Christopher Furlong | Getty Images
The underemployed: More than 17 percent of the U.S. employed are part of the part-time economy.

Alex Gyani had an idea, but even he considered it a little far-fetched.

A 24-year-old psychologist working for the British government, Mr. Gyani was supposed to come up with new ways to help people find work. He was intrigued by an obscure 1994 study that tracked a group of unemployed engineers in Texas. One group of engineers, who wrote about how it felt to lose their jobs, were twice as likely to find work as the ones who didn't. Mr. Gyani took the study to a job center in Essex, northeast of London, where he was assigned for several months. Sure, it seemed crazy, but would it hurt to give it a shot? Hayley Carney, one of the center's managers, was willing to try.

Ms. Carney walked up to a man slumped in a plastic chair in the waiting area as Mr. Gyani watched from across the room. The man — 28, recently separated and unemployed for most of his adult life — was "our most difficult case," Ms. Carney said later.

"How would you like to write about your feelings" about being out of a job? she asked the man. Write for 20 minutes. Once a week. Whatever pops into your head.

An awkward silence followed. Maybe this was a bad idea, Mr. Gyani remembers thinking.

But then the man shrugged. Why not? And so, every week, after seeing a job adviser, he would stay and write. He wrote about applying for dozens of jobs and rarely hearing back, about not having anything to get up for in the morning, about his wife who had left him. He would reread what he had written the week before, and then write again.

Over several weeks, his words became less jumbled. He started to gain confidence, and his job adviser noticed the change. Before the month was out, he got a full-time job in construction — his first.

An Idea Born in America

Did the writing exercise help the man find a job? Even now it's hard for Mr. Gyani to say for sure. But it was the start of a successful research trial at the Essex job center — one that is part of a much larger social experiment underway in Britain. A small band of psychologists and economists is quietly working to transform the nation's policy making. Inspired by behavioral science, the group fans out across the country to job centers, schools and local government offices and tweaks bureaucratic processes to better suit human nature. The goal is to see if small interventions that don't cost much can change behavior in large ways that serve both individuals and society.

It is an American idea, refined in American universities and popularized in 2008 with the best seller "Nudge," by Richard H. Thaler and Cass R. Sunstein. Professor Thaler, a contributor to the Economic View column in Sunday Business, is an economist at the University of Chicago, and Mr. Sunstein was a senior regulatory official in the Obama administration, where he applied behavioral findings to a range of regulatory policies, but didn't have the mandate or resources to run experiments.

But it is in Britain that such experiments have taken root. Prime Minister David Cameron has embraced the idea of testing the power of behavioral change to devise effective policies, seeing it not just as a way to help people make better decisions, but also to help government do more for less.

In 2010, Mr. Cameron set up the Behavioral Insights Team — or nudge unit, as it's often called. Three years later, the team has doubled in size and is about to announce a joint venture with an external partner to expand the program.

The unit has been nudging people to pay taxes on time, insulate their attics, sign up for organ donation, stop smoking during pregnancy and give to charity — and has saved taxpayers tens of millions of pounds in the process, said David Halpern, its director. Every civil servant in Britain is now being trained in behavioral science. The nudge unit has a waiting list of government departments eager to work with it, and other countries, from Denmark to Australia, have expressed interest.

In fact, five years after it arrived in Washington, nudging appears to be entering the next stage, with a new team in the White House planning to run policy trials inspired in part by Britain's program. "First the idea traveled to Britain and now the lessons are traveling back," said Professor Thaler, who is an official but unpaid adviser to the nudge unit. "Britain is the first country that has mainstreamed this on a national level."

Success With Scofflaws

At the core of nudging is the belief that people do not always act in their own self-interest. We can be undone by anxiety and swayed by our desire to fit in. We have biases and habits, and we can be lazy: Faced with a choice, we are more likely than not to go with a default option, be that a mobile ringtone or a pension plan.

Manipulating behavior is old hat in the private sector, where advertisers and companies have been nudging consumers for decades. Just think of strategically placed chocolate bars at the checkout counter. But in public policy, nudge proponents study human behavior to try to figure out why people sometimes make choices that they themselves would consider poor. Then they test small changes in how those choices are presented, to see whether people can be steered toward better decisions — like putting apples, not chocolate bars, at eye level in school cafeterias. It is tricky to run perfectly controlled experiments in real-life situations, but proving the worth of nudges is a central principle of the program, Mr. Halpern said.

One of the biggest successes of the nudge unit involves tax payment. Inspired in part by a field experiment in Minnesota, Mr. Halpern's team has helped test different reminder letters on hundreds of thousands of people who haven't paid their tax bills. One nudge was a sentence telling recipients that a majority of people in their community had already paid their taxes. Another said that most people who owe a similar amount of tax had paid.

Both messages bolstered tax collection, and combining them had an even stronger effect. Over the last financial year, the letters brought forward £210 million of revenue, Britain's revenue and customs department says — money that otherwise would have had to be chased in costly court procedures and failed to earn interest for the government.

"I think we'll look back on this in a decade or two and say, 'You mean we didn't used to do this?' " said Mr. Halpern, a former professor of social psychology at Cambridge University. He refers to the nudge unit as a "guerrilla operation" working from the inside to make government more efficient. "Imagine if we could just improve what we do by 5, 10, 15 percent every year," he said. "I mean, that sort of fixes our problem regarding budgets and austerity."

Creating Commitment

One morning in late May 2008, 10 copies of a little red book arrived for Rohan Silva in Norman Shaw South, the Westminster wing where the leader of the political opposition — at the time, the Conservatives — is traditionally housed.

The book was "Nudge," and Mr. Silva, then 27 and David Cameron's youngest adviser, piled them up on his desk. He had read the book as soon as it came out, a few weeks before. In fact, he had read deeply on behavioral economics and social psychology and met many of the American academics who specialized in the field. He was eager to spread the message in his country. "We used to joke about Ro being on commission for Thaler and Sunstein," said Steve Hilton, Mr. Cameron's former director of strategy and now a visiting scholar at Stanford.

Mr. Silva sat in a busy open-plan space. There was a lot of traffic, and the books went quickly. One day, Mr. Cameron picked up a copy.

"So this is the book you've all been talking about," he said.

"Yeah," Mr. Silva said. "You should read it."

A week later, Mr. Cameron was quoting whole passages, and he, too, wanted to meet Mr. Thaler. "The really radical thing that Richard opened up to us is his concept of choice architecture," Mr. Silva said in a recent interview. (He left Downing Street in July to start his own technology business.) "Governments have a set of nudges in everything they do, even if they don't do anything. You can either be deliberate about it or not."

In February 2010, three months before he became prime minister, Mr. Cameron gave a talk at a TED conference laying out his vision for a "new age of government."

"If you combine this very simple, very conservative thought — go with the grain of human nature — with all the advances in behavioral economics," he said, "I think we can achieve a real increase in well-being, in happiness, in a stronger society without necessarily having to spend a whole lot more money."

Within weeks of Mr. Cameron's taking office in May that year, the nudge unit was born. The team, which now counts 16 members, has run more than 50 experiments, often in fields that members know little about to start with.

Mr. Gyani, the psychologist, had never been inside a job center. He didn't know that job seekers had to fill out as many as nine forms upon arrival at the center and then wait weeks to see an adviser while the forms were being processed. Until he met a man who had written 600 applications and received only four responses, he hadn't fully grasped the demoralizing effect of a difficult job market.

But as a behavioral psychologist and researcher, he was familiar with academic literature that might apply to real-world problems. In addition to the research on expressive writing by unemployed engineers, he had read about the concept of commitment. He had seen the startling results of voter mobilization campaigns in the United States in which voters were not asked just "Are you going to vote?" but also: "What route are you taking to the polling station? At what time are you planning to go? What bus will get you there?"

Simply asking people to make a detailed plan — in essence, a commitment — in a get-out-the-vote script more than doubles the script's impact, said Todd Rogers, assistant professor of public policy at the Kennedy School of Government at Harvard, who conducted an experiment with hundreds of thousands of participants in the run-up to the 2008 United States presidential election. Plan-making helps people make time for concrete actions, Mr. Rogers said, and helps people overcome specific, expected obstacles.

Mr. Gyani decided to apply these ideas to the job centers. He helped design an initial trial in which 2,000 people looking for jobs were randomly split into two groups: The first group continued to fill out many forms and wait for a visit with an adviser. Those in the second group filled out only two forms and saw a job adviser immediately. If those in the second group hadn't found work within eight weeks, they were also offered the expressive-writing exercise and a test to identify their strengths. Throughout, advisers in the nudged group not only reminded people to go to a job interview or update their résumé, but also asked them how they planned to get to the interview and at what time of day they would write their résumé. They wrote down the plan in front of their adviser.

"The idea," Mr. Gyani said, "was to create commitment."

Preliminary results of the trial surprised even Mr. Gyani. Of the 1,000 unemployed workers who had been nudged, 60 percent were back in a job within 13 weeks, compared with 51 percent of those who weren't nudged.

"I thought, wow, even if this drops by half when we scale it up, it's massive," Mr. Gyani said. "This could mean tens of thousands of people leaving unemployment."

The package has been introduced across the county of Essex in a trial involving some 20,000 job seekers. It is now being rolled out nationally, and the nudge unit will now study which of the measures drove the results: Was it the expressive writing? Getting a job adviser right away? The plan-making? Some combination? "The interventions that work seem obvious with hindsight," said Owain Service, the unit's deputy. "But we usually test several variants that don't work and they would have seemed just as obvious."

One example of that phenomenon involved getting people to insulate their attics. Successive governments had tried, offering generous subsidies. But only a tiny number of people put their hands up. Economists were baffled.

In 2011, the nudge unit started brainstorming. At the time, Groupon was all the rage, and one idea that the team liked was offering group discounts for neighbors who jointly committed to put in insulation. The more people someone recruited, the bigger the discount.

"It seemed a perfect way to mobilize green-minded citizens," said Samuel Nguyen, an economist involved in the effort. And it seemed in line with the behavioral insight that people respond to peer pressure. The trial, however, produced no effect.

More from The New York Times:

A Few Findings from Britain's Nudge Unit

British Finance Chief Hails Austerity's Benefits

Big Storm Moves Across Britain and the Continent

The group went back to the drawing board. Mr. Halpern remembered the chief executive of an energy company telling him over dinner that people resisted insulation because it meant cleaning up accumulated piles of junk in their attics. A couple of weeks later, Mr. Nguyen came into the office with a photograph of his mother's cluttered attic. "This time we were onto something," Mr. Halpern recalled.

When the nudge unit offered loft-clearing services with the help of B&Q, a home-improvement store, the share of households that agreed to insulate jumped.

"The presumption in the energy department had been that you just have to make the subsidy bigger," Mr. Halpern said. "Actually, you didn't. When you helped people clear their loft — even though they had to pay for the service — there was a 4.8-fold increase in uptake."

Libertarian Paternalism

Britain's nudge unit has largely avoided American-style ideological polarization, but it has its critics.

Some are uncomfortable with a government fiddling with people's choices, however subtly. A small libertarian magazine, Spiked, has declared a "war on nudge" and cites critics like Mark D. White, a philosopher at the City University of New York, who argues that nudging "is very much coercive, and in some ways more insidious than 'old school' paternalistic policies such as prohibiting or taxing behavior."

Others fear that the approach could become a euphemism for shrinking government services. They accuse Mr. Cameron of testing the concept selectively; they say he has cut deeply into welfare programs without putting those cuts to a rigorous test. The most nuanced critique comes from those who question the ethics of behavioral experimentation on unwitting, and sometimes vulnerable, citizens.

The work in job centers caused some controversy this year when a job seeker reportedly complained of feeling coerced to take a "strength identification test." The test was borrowed from Martin Seligman, the University of Pennsylvania psychologist, and taking it was meant to bolster confidence. It had been added to the mix of behavioral measures tested in Essex.

Gerry Stoker, professor of politics and governance at the University of Southampton, is among those concerned that job seekers might fear losing their benefits even if they are told that the exercises are voluntary. "The exercise itself is worthy and the testing is eminently sensible," Professor Stoker said. "But you need debriefs with participants."

Despite such squabbles, the question in Britain no longer seems to be whether, but how, to nudge. In their book, Professor Thaler and Mr. Sunstein defined their approach as steering people toward decisions deemed superior by the government but leaving them free to choose. "Libertarian paternalism," they called it, and while that term is not used much in Britain, there is broad agreement on the subject among the left and the right.

Mr. Halpern used to be policy chief for Tony Blair, the former Labour prime minister, and later wrote a report on behavioral policy-making commissioned by Mr. Blair's Labour Party successor, Gordon Brown. In one small way, the 2010 election campaign was also a race to decide which party would carry out an idea that had been percolating in the intellectual ranks of both for some years.

Wider Horizons

One of Mr. Thaler's favorite nudges is something that Schiphol Airport near Amsterdam adopted in public bathrooms: a small sticker of a fly in the center of a urinal has been shown to improve aim. It saves the airport cleaning costs.

During a recent visit to Downing Street, Mr. Thaler ran into Mr. Cameron in the men's room. There were no fly stickers.

"What's the deal?" he joked.

Uptake of nudging can be slow. In the United States, President Obama appointed Mr. Sunstein as head of the Office of Information and Regulatory Affairs in 2008. Mr. Sunstein's job was to oversee new regulations, make older ones smarter and scrap those that didn't work well. Among the successes, as outlined in his latest book, "Simpler," were simplified mortgages, fuel-economy labels for cars and calorie counts on menus in chain restaurants.

Now experiments seem ready to become part of American policy-making as well. Maya Shankar, a senior policy adviser at the White House Office of Science and Technology Policy, has been building a new social and behavioral science team inspired in part, she said, by the savings achieved in Britain. Her team wants to use such "evidence-based policy-making," she said, so that "government services are efficient, effective, and serve the needs of the American people."

Convinced that there is a wider market for such programs, Mr. Cameron is spinning off the nudge unit into an entity free to advise companies and other governments on social projects. Its main clients will remain the Cabinet Office, which has offered a five-year contract, and other British government departments. A nonprofit research institution is favored to become the team's partner.

Nudging will never replace traditional public policy, said Mr. Halpern, the nudge unit's director. Paraphrasing Oliver Letwin, a cabinet minister, he said: "No one is proposing removing the law against murder and replacing it with a nudge."

But behavioral insights can improve many policies he said. "It's when this is generalized that we could be talking about billions," he said.

All because most of us want to fit in?

"Look," he said. "Human beings are social animals."

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