Advertisement

The Journal of Economic Inequality

, Volume 10, Issue 3, pp 375–395 | Cite as

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

  • Olivier BargainEmail author
  • Herwig Immervoll
  • Heikki Viitamäki
Article

Abstract

The main objectives of social assistance benefits, 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 benefit agencies. Most studies have to rely on interview-based data, with misreporting and measurement errors affecting the variables needed to establish both benefit receipt and benefit entitlement. In this paper, we exploit a unique combination of Finnish administrative data and eligibility simulations based on the tax-benefit calculator of the Finnish authorities, carefully investigating the measurement issues that remain. We find 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.

Keywords

Take-up Social assistance Poverty Register data 

JEL Classification

D31 H31 H53 I38 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. 1.
    Aho, S., Virjo I.: More selectivity in unemployment compensation in finland: has it led to activation or increased poverty? In: Minimum Income Schemes in Europe. Guy Standing ed., ILO (2002)Google Scholar
  2. 2.
    Anderson, P.M., Meyer, B.: Unemployment insurance takeup rates and the after-tax value of benefits. Q. J. Econ. 112, 913–937 (1997)CrossRefGoogle Scholar
  3. 3.
    Blank, R.: What cause public assistance caseloads to grow? NBER Working Paper 6343 (1997)Google Scholar
  4. 4.
    Blank, R., Ruggles, P.: When do women use aid to families with dependent children and food stamp? The dynamics of eligibility versus participation. J. Hum. Resour. 31(1), 57–89 (1996)CrossRefGoogle Scholar
  5. 5.
    Bramley, G., Lancaster, S., Gordon, D.: Benefit take-up and the geography of poverty in Scotland. Reg. Stud. 34(6), 507–519 (2000)CrossRefGoogle Scholar
  6. 6.
    Currie, J.: The take-up of social benefits. NBER Working Paper No. 10488 (2004)Google Scholar
  7. 7.
    Duclos, J-Y.: Modelling the take-up of state support. J. Public Econ. 58, 391–415 (1995)CrossRefGoogle Scholar
  8. 8.
    Fairlie, R.W.: An extension of the blinder-oaxaca decomposition technique to logit and probit models. J. Econ. Soc. Meas. 30(4), 305–316 (2005)Google Scholar
  9. 9.
    Fry, V., Stark, G.: The take-up of supplementary benefit: gaps in the safety net? In: Dilnot, A., Walker, I. (eds.) The Economics of Social Security, pp. 179–191. Oxford University Press (1989)Google Scholar
  10. 10.
    Gustafsson, B.: Macroeconomic performance, old age security and and the rate of social assistance recipients in Sweden. Eur. Econ. Rev. 26, 319–338 (1984)CrossRefGoogle Scholar
  11. 11.
    Gustafsson, B.: Assessing non-use of social assistance. Eur. J. Soc. Work 5(2), 149–158 (2002)CrossRefGoogle Scholar
  12. 12.
    Hernanz, V., Malherbert, F., Pellizzari, M.: Take-up of Welfare Benefits in OED Countries: A Review of the Evidence. OECD working paper, 17 (2004)Google Scholar
  13. 13.
    Jäntti, M.: Measurement Error in Non Take-up of Social Benefits: Housing Allowance and Earnings in Finland. Report for the AIMAP project (2006)Google Scholar
  14. 14.
    Kayser, H., Frick, J.R.: Take it or leave it: (Non-)Take-up behavior of social assistance in Germany. Schmoller’s Jahrbuch—J. Appl. Soc. Sci. 121(1), 27–58 (2000)Google Scholar
  15. 15.
    Kim, M., Mergoupis, T.: The working poor and welfare recipiency: participation, evidence, and policy directions. J. Econ. Issues 31(3), 707–729 (1997)Google Scholar
  16. 16.
    Kleven, H.J, Kopczuk, W.: Transfer Program Complexity and Take up of Social Benefits. NBER Working Paper 14301 (2008)Google Scholar
  17. 17.
    Matsaganis, M.: On Measurement Error, Tax Evasion and Target Inefficiency. AIMAP report (2007)Google Scholar
  18. 18.
    McGarry, K.: Factors determining participation of the elderly in supplementary security income. J Hum. Resour. 31(2), 331–358 (1996)CrossRefGoogle Scholar
  19. 19.
    Ministry of Social Affairs and Health: Trends in Social Protection. Helsinki (2006)Google Scholar
  20. 20.
    Moffitt, R.: An economic model of welfare stigma. Am. Econ. Rev. 73(5), 1023–1035 (1983)Google Scholar
  21. 21.
    Neumann, U., Hertz, M.: Verdeckte Armut in Deutschland. ISL Institut für Sozialberichterstattung & Lebenslagenforschung, Forschungsbericht im Auftrag der Friedrich-Ebert-Stiftung (1998)Google Scholar
  22. 22.
    Pudney, S.: The Impact of Measurement Errors in Probits Model of Benefit Take-up. mimeo (2001)Google Scholar
  23. 23.
    Pudney, S., Hernandez, M., Hancock, R.: The Welfare Cost of Means-Testing: Pensioner Participation in Income Support. Paper presented at the Royal Economic Society Conference, Warwick 2003 (2002)Google Scholar
  24. 24.
    Riihelä, M., Sullström, R., Tuomala, M.: On the Recent Trends in Economic Poverty in Finland. Tampere Economic Working Paper 23 (2001)Google Scholar
  25. 25.
    Riphahn, R.T.: Rational poverty or poor rationality? The take-up of social assistance benefits. Rev. Income Wealth 47(3), 379–398 (2001)CrossRefGoogle Scholar
  26. 26.
    Saarela, J.: How unemployment duration affects social assistance receipt: evidence from Finland. Int. J. Soc. Welf. 13(3), 223–243 (2004)CrossRefGoogle Scholar
  27. 27.
    Terracol, A.: Analysing the Take-Up of Means-Tested Benefits in France. mimeo, Université Paris I-Panthéon-Sorbonne (2002)Google Scholar
  28. 28.
    Törmälehto, V.: Robustness Assessment Report for Income Distribution Data: Finland: Income Distribution Survey 1998. Statistics Finland (2001)Google Scholar
  29. 29.
    van Oorschot, W.: Take It or Leave it: a Study of Non-Take-Up of Social Security Benefits. Tilburg University Press, Tilburg (1995)Google Scholar
  30. 30.
    Virjo, I.: Toimeentulotuen alikäyt ön laajuus ja syyt. (The extent and motives of non-utilisation of social assistance). Janus 8(1), 28–44 (2000)Google Scholar

Copyright information

© Springer Science+Business Media, LLC. 2010

Authors and Affiliations

  • Olivier Bargain
    • 1
    • 2
    • 3
    Email author
  • Herwig Immervoll
    • 4
  • Heikki Viitamäki
    • 5
  1. 1.University College DublinDublin 4Ireland
  2. 2.Institute for the Study of Labor (IZA)BonnGermany
  3. 3.Centre for Household, Income, Labour and Demographic Economics (CHILD)TorinoItaly
  4. 4.OECD, Paris and IZA, ISER and European Center for Social Welfare Policy and ResearchCanberraAustralia
  5. 5.VATTHelsinkiFinland

Personalised recommendations