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The effect of benefits level on take-up rates: evidence from a natural experiment

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  • Momi Dahan

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  • Udi Nisan

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Abstract

This paper exploits a quasi-natural experiment to study the effect of social benefits level on take-up rates. We find that households who are eligible for double benefits (twins) have much higher take-up rate - up to double - as compared to a control group of households. Our estimated effect of benefits level is much higher relative to the standard cross section estimates. This finding is less exposed to a selection bias that might plague much of the previous research on the link between benefits level and take-up. It provides strong empirical support for the level of benefits as a key factor in determining take-up rates.
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Suggested Citation

  • Momi Dahan & Udi Nisan, 2010. "The effect of benefits level on take-up rates: evidence from a natural experiment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 17(2), pages 151-173, April.
  • Handle: RePEc:kap:itaxpf:v:17:y:2010:i:2:p:151-173 DOI: 10.1007/s10797-009-9109-0
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    References listed on IDEAS

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    1. Janet Currie, 2004. "The Take Up of Social Benefits," NBER Working Papers 10488, National Bureau of Economic Research, Inc.
    2. Angrist, Joshua D, 2001. "Estimations of Limited Dependent Variable Models with Dummy Endogenous Regressors: Simple Strategies for Empirical Practice," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(1), pages 2-16, January.
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    6. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-1035, December.
    7. 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, Oxford University Press, vol. 118(3), pages 815-842.
    8. Patricia M. Anderson & Bruce D. Meyer, 1997. "Unemployment Insurance Takeup Rates and the After-Tax Value of Benefits," The Quarterly Journal of Economics, Oxford University Press, vol. 112(3), pages 913-937.
    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. Janet Currie, 2000. "Do Children of Immigrants Make Differential Use of Public Health Insurance?," NBER Chapters,in: Issues in the Economics of Immigration, pages 271-308 National Bureau of Economic Research, Inc.
    11. Ashenfelter, Orley & Krueger, Alan B, 1994. "Estimates of the Economic Returns to Schooling from a New Sample of Twins," American Economic Review, American Economic Association, vol. 84(5), pages 1157-1173, December.
    12. Rosenzweig, Mark R & Wolpin, Kenneth I, 1980. "Testing the Quantity-Quality Fertility Model: The Use of Twins as a Natural Experiment," Econometrica, Econometric Society, vol. 48(1), pages 227-240, January.
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    Citations

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    Cited by:

    1. Fuchs, Michael, 2007. "Social assistance - no, thanks? Empirical analysis of non-take-up in Austria 2003," EUROMOD Working Papers EM4/07, EUROMOD at the Institute for Social and Economic Research.
    2. Momi Dahan & Udi Nisan, 2006. "Low Take-up Rates: The Role of Information," CESifo Working Paper Series 1829, CESifo Group Munich.
    3. Julie Janssens & Natascha Van Mechelen, 2017. "Who is to Blame? An Overview of the Factors Contributing to the Non-Take-Up of Social Rights," Working Papers 1708, Herman Deleeck Centre for Social Policy, University of Antwerp.
    4. Zantomio, Francesca, 2008. "The route to take-up: raising incentives or lowering barriers?," ISER Working Paper Series 2008-35, Institute for Social and Economic Research.

    More about this item

    Keywords

    Take-up; Social benefits; I38;

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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