Electoral institutions that encourage citizens to vote are widely used around the world, yet little is known about the effects of such institutions on voter participation and the composition of the electorate. I combine a field experiment with a change in Peruvian voting laws reducing the fine for abstention to assess the effect of monetary incentives meant to encourage voter participation. Using random experimental variation in the perceived change of the fine and an objective measure of turnout at the individual level, I estimate that a 10 percent decrease in the cost of abstention decreases the probability of voting by 2.1 percentage points. Consistent with the theoretical model presented, the reduction in turnout induced by the change in the fine is driven by voters who (i) are in the center of the political spectrum, (ii) hold less political information, and (iii) are less interested in politics. I also find that the increase in abstention in response to reductions in the fine does not change preferences for specific policies, on average. Further, involvement in politics, as measured by the decision to acquire political information, seems to be independent of the level of the fine. Additional results indicate that the reduction in the fine does not affect the incidence of vote buying, but increases the price paid for a vote.
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