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How tight are safety-nets in Nordic countries? : evidence from Finnish register data

Author

Listed:
  • Olivier Bargain
  • Herwig Immervoll
  • Heikki Viitamäki

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 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 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

  • Olivier Bargain & Herwig Immervoll & Heikki Viitamäki, 2007. "How tight are safety-nets in Nordic countries? : evidence from Finnish register data," Working Papers 200712, School of Economics, University College Dublin.
  • Handle: RePEc:ucn:wpaper:200712
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    File URL: http://hdl.handle.net/10197/47
    File Function: First version, 2007
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    References listed on IDEAS

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    1. Bargain, Olivier & Orsini, Kristian, 2004. "In-work policies in Europe: killing two birds with one stone?," EUROMOD Working Papers EM4/04, EUROMOD at the Institute for Social and Economic Research.
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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, pages 665-688.
    2. Teemu Lyytikäinen, 2008. "Studies on the Effects of Property Taxation, Rent Control and Housing Allowances," Research Reports 140, Government Institute for Economic Research Finland (VATT).
    3. 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, pages 665-688.

    More about this item

    Keywords

    Take-up; Social assistance; Register data; Public welfare; Poverty;

    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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