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No claim, no pain. Measuring the non-take-up of social assistance using register data

  • Olivier Bargain

    ()

  • Herwig Immervoll
  • Heikki Viitamäki

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. Copyright Springer Science+Business Media, LLC. 2012

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File URL: http://hdl.handle.net/10.1007/s10888-010-9158-8
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Article provided by Springer in its journal The Journal of Economic Inequality.

Volume (Year): 10 (2012)
Issue (Month): 3 (September)
Pages: 375-395

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Handle: RePEc:kap:jecinq:v:10:y:2012:i:3:p:375-395
Contact details of provider: Web page: http://springerlink.metapress.com/link.asp?id=111137

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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. 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.
  3. Stephen Pudney & Monica Hernandez & Ruth Hancock, 2007. "The welfare cost of means-testing: pensioner participation in income support," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(3), pages 581-598.
  4. Currie, Janet, 2004. "The Take-Up of Social Benefits," IZA Discussion Papers 1103, Institute for the Study of Labor (IZA).
  5. 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.
  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. 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.
  8. Rebecca M. Blank, 1997. "What Causes Public Assistance Caseloads to Grow?," NBER Working Papers 6343, National Bureau of Economic Research, Inc.
  9. Ruth Hancock & Stephen Pudney & Geraldine Barker & Monica Hernandez & Holly Sutherland, 2003. "The take-up of multiple means-tested benefits by British pensioners. Evidence from the Family Resources Survey," Discussion Papers in Economics 03/7, Department of Economics, University of Leicester.
  10. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-35, December.
  11. 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.
  12. repec:ese:iserwp:2006-12 is not listed on IDEAS
  13. 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.
  14. Henrik Jacobsen Kleven & Wojciech Kopczuk, 2011. "Transfer Program Complexity and the Take-Up of Social Benefits," American Economic Journal: Economic Policy, American Economic Association, vol. 3(1), pages 54-90, February.
  15. 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.
  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.
  17. 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.
  18. Marlene Kim & Thanos Mergoupis, 1995. "The Working Poor and Welfare Recipiency," Economics Working Paper Archive wp_151, Levy Economics Institute.
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