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Explaining benefit take-up behavior – the role of incentives and habits

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Listed:
  • Rosenqvist, Olof

    (IFAU - Institute for Evaluation of Labour Market and Education Policy)

  • Selin, Håkan

    (IFAU - Institute for Evaluation of Labour Market and Education Policy)

Abstract

Take-up of social benefits is a central issue in poverty alleviation and fis cal evaluations of policy reforms. However, it is difficult t o fi nd exogenous variation in the benefit level, and little is therefore known about take up responses to basic financial i ncentives. We exploit large and plausibly random variation in levels of ”flat rate parental leave benefits”, which all Swedish parents are entitled to. There are no financial r easons t o leave money on the table, but take-up is nevertheless imperfect. Higher benefits substantially increase claiming across the income d istribution. We fur ther detect sizeable spill-over effects on subsequent take-up of low-income earners.

Suggested Citation

  • Rosenqvist, Olof & Selin, Håkan, 2023. "Explaining benefit take-up behavior – the role of incentives and habits," Working Paper Series 2023:24, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    • Handle: RePEc:hhs:ifauwp:2023_024
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    References listed on IDEAS

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    More about this item

    Keywords

    Parental benefits; incomplete take-up; after-tax benefits;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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