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No Claim, No Pain - Measuring the Non-Take-up of Social Assistance using Register Data

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Author Info

  • Olivier Bargain

    (University College Dublin)

  • Herwig Immervoll

    (OECD)

  • Heikki Viitamäki

    (VATT)

Abstract

The main objectives of social assistance benefits, including poverty alleviation and labor- market or social reintegration, can be seriously compromised if support is difficult to access. While recent studies point to high non-take-up rates, existing evidence does not make full use of the information recorded by benefit agencies. Most studies have to rely on interview-based data, with misreporting and measurement errors affecting the variables needed to establish both benefit receipt and benefit entitlement. In this paper, we exploit a unique combination of Finnish administrative data and eligibility simulations based on the tax-benefit calculator of the Finnish authorities, carefully investigating the measurement issues that remain. We find rates of non-take-up that are both substantial and robust: 40% to 50% of those eligible do not claim. Using repeated cross-section estimations for years 1996-2003, we identify a set of stable determinants of claiming behavior and suggest that changes in behavior could drive the observed downward trend in take-up rates during the post-recession period. We discuss the poverty implications of our results.

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File URL: http://www.ucd.ie/t4cms/wp09.31.pdf
File Function: First version, 2009
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Bibliographic Info

Paper provided by School Of Economics, University College Dublin in its series Working Papers with number 200931.

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Length: 27 pages
Date of creation: 08 Dec 2009
Date of revision:
Handle: RePEc:ucn:wpaper:200931

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

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References

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  1. Rebecca M. Blank & Patricia Ruggles, 1996. "When Do Women Use Aid to Families with Dependent Children and Food Stamps? The Dynamics of Eligibility Versus Participation," Journal of Human Resources, University of Wisconsin Press, vol. 31(1), pages 57-89.
  2. Glen Bramley & Sharon Lancaster & David Gordon, 2000. "Benefit Take-up and the Geography of Poverty in Scotland," Regional Studies, Taylor & Francis Journals, vol. 34(6), pages 507-519.
  3. Riphahn, Regina T, 2001. "Rational Poverty or Poor Rationality? The Take-Up Study of Social Assistance Benefits," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 47(3), pages 379-98, September.
  4. Pudney, Stephen & Monica Hernandez & Ruth Hancock, 2003. "The Welfare Cost of Means-Testing: Pensioner Participation in Income Support," Royal Economic Society Annual Conference 2003 171, Royal Economic Society.
  5. Henrik Jacobsen Kleven & Wojciech Kopczuk, 2008. "Transfer Program Complexity and the Take Up of Social Benefits," NBER Working Papers 14301, National Bureau of Economic Research, Inc.
  6. Duclos, Jean-Yves, 1995. "Modelling the take-up of state support," Journal of Public Economics, Elsevier, vol. 58(3), pages 391-415, November.
  7. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-35, December.
  8. 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.
  9. 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.
  10. Rebecca M. Blank, 2001. "What Causes Public Assistance Caseloads to Grow?," Journal of Human Resources, University of Wisconsin Press, vol. 36(1), pages 85-118.
  11. Monica Hernandez & Stephen Pudney & Ruth Hancock, 2006. "The Welfare Cost of Means Testing: Pensioner Participation in Income," Working Papers 2006004, The University of Sheffield, Department of Economics, revised Apr 2006.
  12. Ruth Hancock & Stephen Pudney & Geraldine Barker & Monica Hernandez & Holly Sutherland, 2004. "The Take-Up of Multiple Means-Tested Benefits by British Pensioners: Evidence from the Family Resources Survey," Fiscal Studies, Institute for Fiscal Studies, vol. 25(3), pages 279-303, September.
  13. Hilke Almut Kayser & Joachim R. Frick, 2000. "Take It or Leave It: (Non-) Take-up Behavior of Social Assistance in Germany," Discussion Papers of DIW Berlin 210, DIW Berlin, German Institute for Economic Research.
  14. Currie, Janet, 2004. "The Take-Up of Social Benefits," IZA Discussion Papers 1103, Institute for the Study of Labor (IZA).
  15. Gustafsson, Bjorn, 1984. "Macroeconomic performance, old age security and the rate of social assistance recipients in Sweden," European Economic Review, Elsevier, vol. 26(3), pages 319-338, December.
  16. Anderson, Patricia M & Meyer, Bruce D, 1997. "Unemployment Insurance Takeup Rates and the After-Tax Value of Benefits," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 913-37, August.
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Cited by:
  1. Natascha Van Mechelen & Sarah Marchal & Tim Goedemé & Ive Marx & Bea Cantillon, 2011. "The CSB-Minimum Income Protection Indicators dataset (CSB-MIPI)," Working Papers 1105, Herman Deleeck Centre for Social Policy, University of Antwerp.

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