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The Welfare Cost of Means Testing: Pensioner Participation in Income

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Author Info

  • Monica Hernandez

    ()
    (Department of Economics, The University of Sheffield)

  • Stephen Pudney
  • Ruth Hancock

Abstract

We estimate parametric and semi-parametric binary choice models of benefit take-up by British pensioners and use a revealed preference argument to infer the cash-equivalent value of disutility arising from stigma or complexity of the claims process. These implicit costs turn out to be relatively small, averaging about £3-4 per week across Income Support recipients. Using the Foster-Greer-Thorbecke measure of poverty among pensioners, we find that allowing for implicit claim costs incurred by benefit recipients raises the measured degree of poverty by not more than 13%.

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Bibliographic Info

Paper provided by The University of Sheffield, Department of Economics in its series Working Papers with number 2006004.

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Length: 42 pages
Date of creation: Apr 2006
Date of revision: Apr 2006
Handle: RePEc:shf:wpaper:2006004

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Related research

Keywords: Benefit take-up; Program participation; pensions; welfare; poverty;

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Cited by:
  1. Ceriani, Lidia & Fiorio, Carlo V. & Gigliarano, Chiara, 2013. "The importance of choosing the data set for tax-benefit analysis," EUROMOD Working Papers EM5/13, EUROMOD at the Institute for Social and Economic Research.
  2. repec:ese:iserwp:2008-35 is not listed on IDEAS
  3. Olivier Bargain & Herwig Immervoll & Heikki Viitamäki, 2009. "No Claim, No Pain - Measuring the Non-Take-up of Social Assistance using Register Data," Working Papers 200931, School Of Economics, University College Dublin.
  4. Bargain, Olivier & Immervoll, Herwig & Viitamäki, Heikki, 2007. "How Tight Are Safety-Nets in Nordic Countries? Evidence from Finnish Register Data," IZA Discussion Papers 3004, Institute for the Study of Labor (IZA).
  5. Ewoudou, Jacques & Tsimpo, Clarence & Wodon, Quentin, 2009. "Stigma and the take-up of social programs," Policy Research Working Paper Series 4962, The World Bank.

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