Pudney S () (Institute for Social and Economic Research) Hancock R (School of Medicine, Health Policy and Practice, University of East Anglia) Sutherland H () (Institute for Social and Economic Research)
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Microsimulation models are commonly used to examine the distributional impact of reforms of the means-tested benefit system. Take-up behaviour is related to the level of entitlement, so reform may induce changes in take-up. We develop a stochastic simulation method and apply it to a probit model of Income Support take-up by British pensioners. The method allows us to adjust net income for the welfare losses due to tangible or intangible claim costs. Endogenous take-up and claim costs both have an important impact on the simulated outcomes of the policy reform.
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Paper provided by Institute for Social and Economic Research in its series ISER working papers with number
2004-04.
Length: 37 Date of creation: 22 Mar 2004 Date of revision: Publication status: published Handle: RePEc:ese:iserwp:2004-04
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