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No claim, no pain - measuring the non-take-up of social assistance using register data

  • Olivier Bargain
  • Herwig Immervoll
  • Heikki Viitamäki

The main objectives of social assistance bene?fits, including poverty alleviation and labor-market or social reintegration, can be seriously compromised if support is difficult to access. While recent studies point to high non-take-up rates, existing evidence does not make full use of the information recorded by benefi?t agencies. Most studies have to rely on interview-based data, with misreporting and measurement errors affecting the variables needed to establish both bene?fit receipt and benefi?t entitlement. In this paper, we exploit a unique combination of Finnish administrative data and eligibility simulations based on the tax-benefi?t calculator of the Finnish authorities, carefully investigating the measurement issues that remain. We ?nd rates of non-take-up that are both substantial and robust: 40% to 50% of those eligible do not claim. Using repeated cross-section estimations for years 1996-2003, we identify a set of stable determinants of claiming behavior and suggest that changes in behavior could drive the observed downward trend in take-up rates during the post-recession period. We discuss the poverty implications of our results.

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File URL: http://hdl.handle.net/10197/2629
File Function: First version, 2009
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Paper provided by School of Economics, University College Dublin in its series Working Papers with number 200931.

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Date of creation: Dec 2009
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Handle: RePEc:ucn:wpaper:200931
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  1. Virginia Hernanz & Franck Malherbet & Michele Pellizzari, 2004. "Take-Up of Welfare Benefits in OECD Countries: A Review of the Evidence," OECD Social, Employment and Migration Working Papers 17, OECD Publishing.
  2. Ruth Hancock & Stephen Pudney & Geraldine Barker & Monica Hernandez & Holly Sutherland, 2004. "The Take-Up of Multiple Means-Tested Benefits by British Pensioners: Evidence from the Family Resources Survey," Fiscal Studies, Institute for Fiscal Studies, vol. 25(3), pages 279-303, September.
  3. Stephen Pudney & Monica Hernandez & Ruth Hancock, 2007. "The welfare cost of means-testing: pensioner participation in income support," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(3), pages 581-598.
  4. Monica Hernandez & Stephen Pudney & Ruth Hancock, 2006. "The Welfare Cost of Means Testing: Pensioner Participation in Income," Working Papers 2006004, The University of Sheffield, Department of Economics, revised Apr 2006.
  5. Rebecca M. Blank, 1997. "What Causes Public Assistance Caseloads to Grow?," NBER Working Papers 6343, National Bureau of Economic Research, Inc.
  6. Currie, Janet, 2004. "The Take-Up of Social Benefits," IZA Discussion Papers 1103, Institute for the Study of Labor (IZA).
  7. Kathleen McGarry, 1996. "Factors Determining Participation of the Elderly in Supplemental Security Income," Journal of Human Resources, University of Wisconsin Press, vol. 31(2), pages 331-358.
  8. Glen Bramley & Sharon Lancaster & David Gordon, 2000. "Benefit Take-up and the Geography of Poverty in Scotland," Regional Studies, Taylor & Francis Journals, vol. 34(6), pages 507-519.
  9. Henrik Jacobsen Kleven & Wojciech Kopczuk, 2011. "Transfer Program Complexity and the Take-Up of Social Benefits," American Economic Journal: Economic Policy, American Economic Association, vol. 3(1), pages 54-90, February.
  10. Riphahn, Regina T, 2001. "Rational Poverty or Poor Rationality? The Take-Up Study of Social Assistance Benefits," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 47(3), pages 379-98, September.
  11. Gustafsson, Bjorn, 1984. "Macroeconomic performance, old age security and the rate of social assistance recipients in Sweden," European Economic Review, Elsevier, vol. 26(3), pages 319-338, December.
  12. 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.
  13. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-35, December.
  14. Marlene Kim & Thanos Mergoupis, 1995. "The Working Poor and Welfare Recipiency," Economics Working Paper Archive wp_151, Levy Economics Institute.
  15. Duclos, Jean-Yves, 1995. "Modelling the take-up of state support," Journal of Public Economics, Elsevier, vol. 58(3), pages 391-415, November.
  16. Rebecca M. Blank & Patricia Ruggles, 1996. "When Do Women Use Aid to Families with Dependent Children and Food Stamps? The Dynamics of Eligibility Versus Participation," Journal of Human Resources, University of Wisconsin Press, vol. 31(1), pages 57-89.
  17. Hilke Almut Kayser & Joachim R. Frick, 2000. "Take It or Leave It: (Non-) Take-up Behavior of Social Assistance in Germany," Discussion Papers of DIW Berlin 210, DIW Berlin, German Institute for Economic Research.
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