Rational Poverty or Poor Rationality? The Take-up of Social Assistance Benefits
In several countries social assistance dependence has been increasing since the 1980s. After surveying the theoretical and empirical take-up literature, this study presents estimates of recent rates of non take-up of social assistance benefits. Once methodological shortcomings of prior estimations are corrected, the results show that take-up has fallen recently and thus cannot explain the rising welfare receipt. Following theoretical predictions, the probability that a rational individual takes up social assistance increases with the expected benefit amount and duration, and falls with application cost and stigma. More than half of all households eligible for transfers under the German social assistance program did not claim their benefits.
|Date of creation:||Mar 2000|
|Publication status:||published in: Review of Income and Wealth, 2001, 47(3), 379-398|
|Contact details of provider:|| Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany|
Phone: +49 228 3894 223
Fax: +49 228 3894 180
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|Order Information:|| Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany|
References listed on IDEAS
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"The Working Poor and Welfare Recipiency,"
Economics Working Paper Archive
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- 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.
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