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

Author

Listed:
  • Olivier Bargain

    (School of Economics, Univeristy College Dublin, CHILD & IZA Bonn)

  • Herwig Immervollz

    (OECD, IZA, ISER and European Center for Social Welfare Policy and Research)

  • Heikki Viitamäkix

    (VATT)

Abstract

The non take-up of social assistance bene?ts due to claim costs may seriously limit the anti-poverty e¤ect of these programs. Yet, available evidence is fragmented and mostly relies on interview-based data, potentially biased by misreporting and measurement errors on both bene?t 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 e¤ect, i.e. a decline in the proportion of groups with higher claiming propensity. We ?nally discuss the targeting e¢ ciency of the social assistance scheme.

Suggested Citation

  • Olivier Bargain & Herwig Immervollz & Heikki Viitamäkix, 2007. "How Tight are Safety-Nets in Nordic Countries? Evidence from Finnish Register Data," Working Papers 200727, Geary Institute, University College Dublin.
  • Handle: RePEc:ucd:wpaper:200727
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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.

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    More about this item

    Keywords

    take-up; social assistance; poverty; register data;
    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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