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Does inconvenience explain low take-up? Evidence from unemployment insurance

Author

Listed:
  • Avraham Ebenstein

    (Lecturer, Department of Economics, Hebrew University of Jerusalem)

  • Kevin Stange

    (Robert Wood Johnson Scholar in Health Policy Research, University of Michigan)

Abstract

Application inconvenience is one popular explanation for why many individuals do not receive the social benefits for which they are eligible. Applications take time and some individuals may decide that the financial benefits do not outweigh these time costs. This paper investigates this explanation using cross-state variation in administrative changes that made applying for unemployment insurance (UI) benefits substantially more convenient over the past decade. We find that the introduction of phone- and Internet-based claiming did not have an appreciable impact on overall UI take-up, nor did it lead to a shift toward recipients that are higher income or likely to be receiving the maximum benefit amount. These findings are inconsistent with a time- and transaction-cost explanation for low take-up, since remote UI claiming is less time intensive. This suggests that reducing application barriers alone may not be an effective tool for increasing program participation. © 2010 by the Association for Public Policy Analysis and Management.

Suggested Citation

  • Avraham Ebenstein & Kevin Stange, 2010. "Does inconvenience explain low take-up? Evidence from unemployment insurance," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(1), pages 111-136.
  • Handle: RePEc:wly:jpamgt:v:29:y:2010:i:1:p:111-136
    DOI: 10.1002/pam.20481
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    File URL: http://hdl.handle.net/10.1002/pam.20481
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    References listed on IDEAS

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    1. Emmanuel Saez, 2009. "Details Matter: The Impact of Presentation and Information on the Take-Up of Financial Incentives for Retirement Saving," American Economic Journal: Economic Policy, American Economic Association, vol. 1(1), pages 204-228, February.
    2. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 249-275.
    3. Christopher J. O'Leary, "undated". "State UI Job Search Rules and Reemployment Services," Upjohn Working Papers and Journal Articles cjo2006, W.E. Upjohn Institute for Employment Research.
    4. Patricia Ketsche & E. Kathleen Adams & Karen Minyard & Rebecca Kellenberg, 2007. "The stigma of public programs: Does a separate S-CHIP program reduce it?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 26(4), pages 775-790.
    5. 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.
    6. McCall, Brian P, 1995. "The Impact of Unemployment Insurance Benefit Levels on Recipiency," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(2), pages 189-198, April.
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    Citations

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    Cited by:

    1. Nicholas Lawson, 2014. "Social Program Substitution and Optimal Policy," Working Papers halshs-00993127, HAL.
    2. Kukla-Acevedo, Sharon & Heflin, Colleen M., 2014. "Unemployment insurance effects on child academic outcomes: Results from the National Longitudinal Survey of Youth," Children and Youth Services Review, Elsevier, vol. 47(P3), pages 246-252.
    3. Lawson, Nicholas, 2015. "Social program substitution and optimal policy," Labour Economics, Elsevier, vol. 37(C), pages 13-27.
    4. Hotchkiss, Julie L. & Moore, Robert E. & Rios-Avila, Fernando, 2017. "Family Welfare and the Cost of Unemployment," FRB Atlanta Working Paper 2017-7, Federal Reserve Bank of Atlanta.
    5. Raj Chetty & Amy Finkelstein, 2012. "Social Insurance: Connecting Theory to Data," NBER Working Papers 18433, National Bureau of Economic Research, Inc.
    6. repec:uwp:jhriss:v:52:y:2017:i:2:p:418-456 is not listed on IDEAS
    7. 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.
    8. Manasi Deshpande & Yue Li, 2017. "Who Is Screened Out? Application Costs and the Targeting of Disability Programs," NBER Working Papers 23472, National Bureau of Economic Research, Inc.
    9. Lachowska, Marta & Meral, Merve & Woodbury, Stephen A., 2016. "Effects of the unemployment insurance work test on long-term employment outcomes," Labour Economics, Elsevier, vol. 41(C), pages 246-265.
    10. repec:hrv:faseco:34330197 is not listed on IDEAS
    11. Laura Kawano & Sara LaLumia, 2017. "How Income Changes During Unemployment: Evidence from Tax Return Data," Journal of Human Resources, University of Wisconsin Press, vol. 52(2), pages 418-456.
    12. Nicholas Lawson, 2013. "Fiscal Externalities and Optimal Unemployment Insurance," AMSE Working Papers 1357, Aix-Marseille School of Economics, Marseille, France, revised 21 Nov 2013.
    13. Dayanand S. Manoli & Nicholas Turner, 2014. "Nudges and Learning: Evidence from Informational Interventions for Low-Income Taxpayers," NBER Working Papers 20718, National Bureau of Economic Research, Inc.
    14. Nicholas Lawson, 2013. "Fiscal Externalities and Optimal Unemployment Insurance," Working Papers halshs-00907807, HAL.
    15. Nicholas Lawson, 2014. "Social Program Substitution and Optimal Policy," AMSE Working Papers 1417, Aix-Marseille School of Economics, Marseille, France, revised 16 May 2014.
    16. Russell, Blair D. & Moulton, Stephanie & Greenbaum, Robert T., 2014. "Take-up of mortgage assistance for distressed homeowners: The role of geographic accessibility," Journal of Housing Economics, Elsevier, vol. 24(C), pages 57-74.

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