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How Tight Are Safety-Nets in Nordic Countries? Evidence from Finnish Register Data

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Author Info

  • Bargain, Olivier

    () (University of Aix-Marseille II)

  • Immervoll, Herwig

    () (OECD, Paris)

  • Viitamäki, Heikki

    () (VATT, Helsinki)

Abstract

The non take-up of social assistance benefits due to claim costs may seriously limit the anti-poverty effect of these programs. Yet, available evidence is fragmented and mostly relies on interview-based data, potentially biased by misreporting and measurement errors on both benefit entitlement and income levels used to assess eligibility. In this paper, we use Finnish administrative data to compare eligibility and actual receipt of social assistance by working-age families during the post-recession period (1996-2003). Possible errors due to time-period issues and discretionary measures by local agencies are carefully investigated. Non take-up is found to be substantial – between 40% and 50% – and increasing during the period. Using repeated cross-section estimations, we identify a set of stable determinants of claiming behavior and suggest that the increasing trend is mainly due to a composition effect, i.e. a decline in the proportion of groups with higher claiming propensity. We finally discuss the targeting efficiency of the social assistance scheme.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3004.

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Length: 26 pages
Date of creation: Aug 2007
Date of revision:
Handle: RePEc:iza:izadps:dp3004

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Keywords: social assistance; take-up; poverty; register data;

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  1. repec:ese:iserwp:2006-12 is not listed on IDEAS
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  21. Brewer, Mike & Duncan, Alan & Shephard, Andrew & Suarez, Maria Jose, 2006. "Did working families' tax credit work? The impact of in-work support on labour supply in Great Britain," Labour Economics, Elsevier, vol. 13(6), pages 699-720, December.
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Cited by:
  1. Teemu Lyytikäinen, 2008. "Studies on the Effects of Property Taxation, Rent Control and Housing Allowances," Research Reports 140, Government Institute for Economic Research Finland (VATT).
  2. Matti Sarvimäki, 2011. "Assimilation to a Welfare State: Labor Market Performance and Use of Social Benefits by Immigrants to Finland," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113(3), pages 665-688, 09.

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