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The Effect of Benefits Level on Take-up Rates: Evidence from a Natural Experiment

  • Momi Dahan
  • Udi Nisan

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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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1885.

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Date of creation: 2007
Date of revision:
Handle: RePEc:ces:ceswps:_1885
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  1. 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.
  2. Janet Currie, 1995. "Do Children of Immigrants Make Differential Use of Public Health Insurance?," NBER Working Papers 5388, National Bureau of Economic Research, Inc.
  3. Janet Currie, 2004. "The Take Up of Social Benefits," NBER Working Papers 10488, National Bureau of Economic Research, Inc.
  4. 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.
  5. 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 227-40, January.
  6. Orley Ashenfelter & Alan Krueger, 1992. "Estimates of the Economic Return to Schooling from a New Sample of Twins," Working Papers 683, Princeton University, Department of Economics, Industrial Relations Section..
  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, MIT Press, vol. 118(3), pages 815-842, August.
  8. Joshua Angrist, 1999. "Estimation of Limited-Dependent Variable Models with Dummy Endogenous Regressors: Simple Strategies for Empirical Practice," Working papers 99-31, Massachusetts Institute of Technology (MIT), Department of Economics.
  9. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-35, December.
  10. 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..
  11. Marianne Bertrand & Erzo Luttmer & Sendhil Mullainathan, 1998. "Network Effects and Welfare Cultures," Working Papers 784, Princeton University, Department of Economics, Industrial Relations Section..
  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. 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.
  14. 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.
  15. Rebecca M. Blank & Patricia Ruggles, 1993. "When Do Women Use AFDC & Food Stamps? The Dynamics of Eligibility vs. Participation," NBER Working Papers 4429, National Bureau of Economic Research, Inc.
  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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