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Endogenizing take-up of social assistance in a microsimulation model. A case study for Germany

Author

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  • Jürgen Wiemers

    (Institute for Employment Research (IAB))

Abstract
Microsimulation studies typically assume that all entitlements to means-tested benefits are actually claimed by eligible households, despite a large body of research that suggests that take-up rates are substantially below 100%. The assumption of full take-up tends to exaggerate the simulated increase in caseloads and fiscal costs of a social policy reform. This paper investigates the impact of non-take-up for two hypothetical scenarios, namely increasing and decreasing the base amount of social assistance in Germany by 100 per month. We find a substantial effect of considering non-take-up on the simulated change in fiscal costs and in particular on the change in caseloads, where the full take-up assumption exaggerates the latter change by a factor of about two.

Suggested Citation

  • Jürgen Wiemers, 2015. "Endogenizing take-up of social assistance in a microsimulation model. A case study for Germany," International Journal of Microsimulation, International Microsimulation Association, vol. 8(2), pages 4-27.
    • Handle: RePEc:ijm:journl:v:8:y:2015:i:2:p:4-27
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    References listed on IDEAS

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    Cited by:

    1. Nolan, Matt, 2018. "Did tax-transfer policy change New Zealand disposable income inequality between 1988 and 2013?," Working Paper Series 20842, Victoria University of Wellington, Chair in Public Finance.
    2. Klinger, Sabine & Weber, Enzo, 2016. "Detecting unemployment hysteresis: A simultaneous unobserved components model with Markov switching," Economics Letters, Elsevier, vol. 144(C), pages 115-118.
    3. Kerstin Bruckmeier & Jürgen Wiemers, 2018. "Benefit Take-Up and Labor Supply Incentives of Interdependent Means-Tested Benefit Programs for Low-Income Households," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 60(4), pages 583-604, December.
    4. Michelle Harnisch, 2019. "Non-Take-Up of Means-Tested Social Benefits in Germany," Discussion Papers of DIW Berlin 1793, DIW Berlin, German Institute for Economic Research.
    5. Céline Marc & Mickaël Portela & Cyrine Hannafi & Rémi Le Gall & Antoine Rode & Stéphanie Laguérodie, 2022. "Quantifier le non-recours aux minima sociaux en Europe : un phénomène d’ampleur qui peine à susciter le débat," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-03618424, HAL.
    6. Herber, Stefanie P. & Kalinowski, Michael, 2016. "Non-take-up of Student Financial Aid: A Microsimulation for Germany," VfS Annual Conference 2016 (Augsburg): Demographic Change 145727, Verein für Socialpolitik / German Economic Association.
    7. Johann Fuchs & Enzo Weber, 2017. "Long-term unemployment and labour force participation: a decomposition of unemployment to test for the discouragement and added worker hypotheses," Applied Economics, Taylor & Francis Journals, vol. 49(60), pages 5971-5982, December.
    8. Eckman, Stephanie & Kreuter, Frauke, 2015. "Misreporting to looping questions in surveys : recall, motivation and burden," IAB-Discussion Paper 201529, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    9. Christoph, Bernhard, 2015. "Empirische Maße zur Erfassung von Armut und materiellen Lebensbedingungen : Ansätze und Konzepte im Überblick," IAB-Discussion Paper 201525, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    10. Maximilian Joseph Blömer & Sebastian Link & Andreas Peichl & Marc Stöckli, 2021. "The Effects of the Means-tested Basic Income Support on the Behavior of Households - an Overview," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 120, September.
    11. Stefanie P. Herber & Michael Kalinowski, 2016. "Non-Take-Up of Student Financial Aid: A Microsimulation for Germany," SOEPpapers on Multidisciplinary Panel Data Research 844, DIW Berlin, The German Socio-Economic Panel (SOEP).
    12. Dietrich, Hans, 2015. "Jugendarbeitslosigkeit aus einer europäischen Perspektive : theoretische Ansätze, empirische Konzepte und ausgewählte Befunde," IAB-Discussion Paper 201524, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    13. Weigand Roland & Wanger Susanne & Zapf Ines, 2018. "Factor Structural Time Series Models for Official Statistics with an Application to Hours Worked in Germany," Journal of Official Statistics, Sciendo, vol. 34(1), pages 265-301, March.
    14. Kerstin Bruckmeier & Andreas Peichl & Martin Popp & Jürgen Wiemers & Timo Wollmershäuser, 2021. "Distributional effects of macroeconomic shocks in real-time," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(3), pages 459-487, September.
    15. Céline Marc & Mickaël Portela & Cyrine Hannafi & Rémi Le Gall & Antoine Rode & Stéphanie Laguérodie, 2022. "Non-take-up of minimum social benefits: quantification in Europe," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-04082347, HAL.
    16. Herber, Stefanie P. & Kalinowski, Michael, 2016. "Non-take-up of student financial aid: A microsimulation for Germany," BERG Working Paper Series 109, Bamberg University, Bamberg Economic Research Group.
    17. Nolan, Matt, 2018. "Did tax-transfer policy change New Zealand disposable income inequality between 1988 and 2013?," Working Paper Series 7661, Victoria University of Wellington, Chair in Public Finance.
    18. Zapf, Ines, 2015. "Who profits from working-time accounts? : empirical evidence on the determinants of working-time accounts on the employers' and employees' side," IAB-Discussion Paper 201523, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    19. Kerstin Bruckmeier & Jürgen Wiemers, 2017. "Benefit take-up and labour supply incentives of interdependent means-tested benefit programmes for low-income households," EcoMod2017 10295, EcoMod.

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    More about this item

    Keywords

    Non-take-up; microsimulation;

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General

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