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How Tight Are Safety-Nets in Nordic Countries? Evidence from Finnish Register Data

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  • Bargain, Olivier

    (Université Montesquieu Bordeaux IV)

  • Immervoll, Herwig

    (OECD)

  • Viitamäki, Heikki

    (VATT, Helsinki)

Abstract

The non take-up of social assistance benefits due to claim costs may seriously limit the anti-poverty effect of these programs. Yet, available evidence is fragmented and mostly relies on interview-based data, potentially biased by misreporting and measurement errors on both benefit entitlement and income levels used to assess eligibility. In this paper, we use Finnish administrative data to compare eligibility and actual receipt of social assistance by working-age families during the post-recession period (1996-2003). Possible errors due to time-period issues and discretionary measures by local agencies are carefully investigated. Non take-up is found to be substantial – between 40% and 50% – and increasing during the period. Using repeated cross-section estimations, we identify a set of stable determinants of claiming behavior and suggest that the increasing trend is mainly due to a composition effect, i.e. a decline in the proportion of groups with higher claiming propensity. We finally discuss the targeting efficiency of the social assistance scheme.

Suggested Citation

  • Bargain, Olivier & Immervoll, Herwig & Viitamäki, Heikki, 2007. "How Tight Are Safety-Nets in Nordic Countries? Evidence from Finnish Register Data," IZA Discussion Papers 3004, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp3004
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    Cited by:

    1. Matti Sarvimäki, 2011. "Assimilation to a Welfare State: Labor Market Performance and Use of Social Benefits by Immigrants to Finland," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113(3), pages 665-688, September.
    2. Lyytikäinen, Teemu, 2008. "Studies on the Effects of Property Taxation, Rent Control and Housing Allowances," Research Reports 140, VATT Institute for Economic Research.
    3. Avram, Silvia, 2013. "Outcomes of social assistance in Central and Eastern Europe: a pre-transfer post-transfer comparison," ISER Working Paper Series 2013-18, Institute for Social and Economic Research.

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    More about this item

    Keywords

    register data; poverty; social assistance; take-up;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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