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Low Take-up Rates: The Role of Information

  • Momi Dahan
  • Udi Nisan

This paper exploits a quasi-natural experiment to study the role of information in determining take-up patterns of social benefits in a non-stigma environment. We find that take-up rate of households who have the incentive to search for information for a longer period of time is between 8 and 13 percentage points higher as compared to a control group of households. This result is robust to the inclusion of various household characteristics. Our finding provides strong empirical support for information as an important explanation for low take-up rates.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2006/wp-cesifo-2006-10/cesifo1_wp1829.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1829.

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Date of creation: 2006
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Handle: RePEc:ces:ceswps:_1829
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  1. Rebecca Blank & David Card & Whitney Newey, 1988. "Recent Trends in Insured and Uninsured Unemployment: Is There an Explanation?," Working Papers 623, Princeton University, Department of Economics, Industrial Relations Section..
  2. Marianne Bertrand & Erzo F. P. Luttmer & Sendhil Mullainathan, 2000. "Network Effects And Welfare Cultures," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 1019-1055, August.
  3. Esther Duflo & Emmanuel Saez, 2002. "The Role of Information and Social Interactions in Retirement Plan Decisions: Evidence from a Randomized Experiment," NBER Working Papers 8885, National Bureau of Economic Research, Inc.
  4. Koning, Ruud H. & Ridder, Geert, 1997. "Rent assistance and housing demand," Journal of Public Economics, Elsevier, vol. 66(1), pages 1-31, October.
  5. 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, vol. 17(2), pages 151-173, April.
  6. Joshua D. Angrist, 2000. "Estimation of Limited-Dependent Variable Models with Dummy Endogenous Regressors: Simple Strategies for Empirical Practice," NBER Technical Working Papers 0248, National Bureau of Economic Research, Inc.
  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. Currie, Janet, 2004. "The Take-Up of Social Benefits," IZA Discussion Papers 1103, Institute for the Study of Labor (IZA).
  9. Richard Dorsett & Christopher Heady, 1991. "The take-up of means-tested benefits by working families with children," Fiscal Studies, Institute for Fiscal Studies, vol. 12(4), pages 22-32, November.
  10. Angrist, Joshua D, 2001. "Estimations of Limited Dependent Variable Models with Dummy Endogenous Regressors: Simple Strategies for Empirical Practice: Reply," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(1), pages 27-28, January.
  11. George J. Borjas & Lynette Hilton, 1995. "Immigration and the Welfare State: Immigrant Participation in Means- Tested Entitlement Programs," NBER Working Papers 5372, National Bureau of Economic Research, Inc.
  12. Emmanuel Saez & Esther Duflo, 2003. "The role of information and social interactions in retirement plan decisions: Evidence from a randomized experiment," Framed Field Experiments 00141, The Field Experiments Website.
  13. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-35, December.
  14. Anna Aizer & Janet Currie, 2002. "Networks or Neighborhoods? Correlations in the Use of Publicly-Funded Maternity Care in California," NBER Working Papers 9209, National Bureau of Economic Research, Inc.
  15. Jennifer L. Warlick, 1982. "Participation of the Aged in SSI," Journal of Human Resources, University of Wisconsin Press, vol. 17(2), pages 236-260.
  16. 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.
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