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The route to take-up: raising incentives or lowering barriers?

  • Zantomio, Francesca

This paper investigates which measures are effective in promoting the take-up of welfare support by needy individuals, considering both financial incentives and policies intended to lower claiming costs. The analysis uses an exogenous policy change, the introduction of the Pension Credit in the United Kingdom in 2003, that reformed the income support scheme available to pensioners. While increasing the entitlement amount for a subgroup of eligible pensioners, the Pension Credit introduction was accompanied by other complementary measures, including an advertisement campaign, reformed `light touch' administration and a more claimant-friendly application procedure. The behavioural response to such exogenous changes is identified using parametric and non parametric analysis of repeated cross sections of Family Resources Survey data. Results consistently show the efficacy of increased financial incentives as take-up triggers, while no effect is found for the `lowering barriers' policies when unaccompanied by concurrent raised monetary rewards.

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Paper provided by Institute for Social and Economic Research in its series ISER Working Paper Series with number 2008-35.

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Date of creation: 01 Oct 2008
Date of revision:
Publication status: published
Handle: RePEc:ese:iserwp:2008-35
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  1. Janice Halpern & Jerry A. Hausman, 1985. "Choice Under Uncertainty: A Model of Applications for the Social Security Disability Insurance Program," NBER Working Papers 1690, National Bureau of Economic Research, Inc.
  2. repec:ese:iserwp:2006-29 is not listed on IDEAS
  3. Stephen Pudney & Monica Hernandez & Ruth Hancock, 2002. "The Welfare Cost of Means-Testing: Pensioner Participation in Income Support," Discussion Papers in Economics 03/2, Department of Economics, University of Leicester.
  4. Stephen Pudney & Ruth Hancock & Holly Sutherland, 2006. "Simulating the Reform of Means-tested Benefits with Endogenous Take-up and Claim Costs," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(2), pages 135-166, 04.
  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.
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  7. Beth Osborne Daponte & Seth Sanders & Lowell Taylor, 1999. "Why Do Low-Income Households not Use Food Stamps? Evidence from an Experiment," Journal of Human Resources, University of Wisconsin Press, vol. 34(3), pages 612-628.
  8. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-35, December.
  9. 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.
  10. 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.
  11. 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.
  12. Edwin Leuven & Barbara Sianesi, 2003. "PSMATCH2: Stata module to perform full Mahalanobis and propensity score matching, common support graphing, and covariate imbalance testing," Statistical Software Components S432001, Boston College Department of Economics, revised 19 Jan 2015.
  13. Blundell, Richard & Fry, Vanessa & Walker, Ian, 1987. "Modelling the Take-up of Means-tested Benefits: the Case of Housing Benefits in the United Kingdom," Economic Journal, Royal Economic Society, vol. 98(390), pages 58-74, Supplemen.
  14. Blank, Rebecca M & Card, David E, 1991. "Recent Trends in Insured and Uninsured Unemployment: Is There an Explanation?," The Quarterly Journal of Economics, MIT Press, vol. 106(4), pages 1157-89, November.
  15. Duclos, Jean-Yves, 1995. "Modelling the take-up of state support," Journal of Public Economics, Elsevier, vol. 58(3), pages 391-415, November.
  16. Hidehiko Ichimura & Christopher R. Taber, 2000. "Direct Estimation of Policy Impacts," NBER Technical Working Papers 0254, National Bureau of Economic Research, Inc.
  17. Momi Dahan & Udi Nisan, 2006. "Low Take-up Rates: The Role of Information," CESifo Working Paper Series 1829, CESifo Group Munich.
  18. Janet Currie, 2004. "The Take Up of Social Benefits," NBER Working Papers 10488, National Bureau of Economic Research, Inc.
  19. 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.
  20. Ruth Hancock & Geraldine Barker, 2005. "The quality of social security benefit data in the British Family Resources Survey: implications for investigating income support take-up by pensioners," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 168(1), pages 63-82.
  21. Hernandez, Monica & Pudney, Stephen, 2007. "Measurement error in models of welfare participation," Journal of Public Economics, Elsevier, vol. 91(1-2), pages 327-341, February.
  22. 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.
  23. Edmonds, Eric, 2002. "Reconsidering the labeling effect for child benefits: evidence from a transition economy," Economics Letters, Elsevier, vol. 76(3), pages 303-309, August.
  24. 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.
  25. Barbara Sianesi, 2001. "Propensity score matching," United Kingdom Stata Users' Group Meetings 2001 12, Stata Users Group, revised 23 Aug 2001.
  26. Francesca Zantomio & Stephen Pudney & Ruth Hancock, 2010. "Estimating the Impact of a Policy Reform on Benefit Take-up: The 2001 extension to the Minimum Income Guarantee for UK Pensioners," Economica, London School of Economics and Political Science, vol. 77(306), pages 234-254, 04.
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