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Low Take-up Rates: The Role of Information

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Author Info

  • Momi Dahan
  • Udi Nisan

Abstract

This paper exploits a quasi-natural experiment to study the role of information in determining take-up patterns of social benefits in a non-stigma environment. We find that take-up rate of households who have the incentive to search for information for a longer period of time is between 8 and 13 percentage points higher as compared to a control group of households. This result is robust to the inclusion of various household characteristics. Our finding provides strong empirical support for information as an important explanation for low take-up rates.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2006/wp-cesifo-2006-10/cesifo1_wp1829.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1829.

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Date of creation: 2006
Date of revision:
Handle: RePEc:ces:ceswps:_1829

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Related research

Keywords: take-up; social benefits; information cost;

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References

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  1. Koning, R.H. & Ridder, G., 1993. "Rent Assistance and Housing Demand," Papers 544, Groningen State, Institute of Economic Research-.
  2. Rebecca Blank & David Card & Whitney Newey, 1988. "Recent Trends in Insured and Uninsured Unemployment: Is There an Explanation?," Working Papers 623, Princeton University, Department of Economics, Industrial Relations Section..
  3. Jennifer L. Warlick, 1982. "Participation of the Aged in SSI," Journal of Human Resources, University of Wisconsin Press, vol. 17(2), pages 236-260.
  4. Sendhil Mullainathan & Marianne Bertrand & Erzo F.P. Luttmer, 1998. "Network Effects and Welfare Cultures," Working papers 98-21, Massachusetts Institute of Technology (MIT), Department of Economics.
  5. Virginia Hernanz & Franck Malherbet & Michele Pellizzari, 2004. "Take-Up of Welfare Benefits in OECD Countries: A Review of the Evidence," OECD Social, Employment and Migration Working Papers 17, OECD Publishing.
  6. Richard Dorsett & Christopher Heady, 1991. "The take-up of means-tested benefits by working families with children," Fiscal Studies, Institute for Fiscal Studies, vol. 12(4), pages 22-32, November.
  7. Anna Aizer & Janet Currie, 2002. "Networks or Neighborhoods? Correlations in the Use of Publicly-Funded Maternity Care in California," NBER Working Papers 9209, National Bureau of Economic Research, Inc.
  8. Esther Duflo & Emmanuel Saez, 2003. "The Role Of Information And Social Interactions In Retirement Plan Decisions: Evidence From A Randomized Experiment," The Quarterly Journal of Economics, MIT Press, vol. 118(3), pages 815-842, August.
  9. Borjas, George J & Hilton, Lynette, 1996. "Immigration and the Welfare State: Immigrant Participation in Means-Tested Entitlement Programs," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 575-604, May.
  10. Currie, Janet, 2004. "The Take-Up of Social Benefits," IZA Discussion Papers 1103, Institute for the Study of Labor (IZA).
  11. repec:feb:natura:0036 is not listed on IDEAS
  12. Joshua D. Angrist, 2000. "Estimation of Limited-Dependent Variable Models with Dummy Endogenous Regressors: Simple Strategies for Empirical Practice," NBER Technical Working Papers 0248, National Bureau of Economic Research, Inc.
  13. Angrist, Joshua D, 2001. "Estimations of Limited Dependent Variable Models with Dummy Endogenous Regressors: Simple Strategies for Empirical Practice: Reply," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(1), pages 27-28, January.
  14. Kathleen McGarry, 1996. "Factors Determining Participation of the Elderly in Supplemental Security Income," Journal of Human Resources, University of Wisconsin Press, vol. 31(2), pages 331-358.
  15. Momi Dahan & Udi Nisan, 2007. "The Effect of Benefits Level on Take-up Rates: Evidence from a Natural Experiment," CESifo Working Paper Series 1885, CESifo Group Munich.
  16. Esther Dufluo & Emmanuel Saez, 2003. "The role of information and social interactions in retirement plan decisions: Evidence from a randomized experiment," Framed Field Experiments 00141, The Field Experiments Website.
  17. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-35, December.
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Cited by:
  1. De Grauwe, Paul & Rovira Kaltwasser, Pablo, 2006. "A behavioural finance model of the exchange rate with many forecasting rules," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/103684, Katholieke Universiteit Leuven.
  2. Antoine Terracol, 2009. "Guaranteed minimum income and unemployment duration in France," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00607219, HAL.
  3. repec:ese:iserwp:2008-35 is not listed on IDEAS

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