Explaining benefit take-up behavior – the role of incentives and habits

Olof Rosenqvist () and Håkan Selin
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Olof Rosenqvist: IFAU - Institute for Evaluation of Labour Market and Education Policy, Postal: Institute for Evaluation of Labour Market and Education Policy, P O Box 513, SE-751 20 Uppsala, Sweden

No 2023:24, Working Paper Series from IFAU - Institute for Evaluation of Labour Market and Education Policy

Abstract: Take-up of social benefits is a central issue in poverty alleviation and fis cal evaluations of policy reforms. However, it is difficult t o fi nd exogenous variation in the benefit level, and little is therefore known about take up responses to basic financial i ncentives. We exploit large and plausibly random variation in levels of ”flat rate parental leave benefits”, which all Swedish parents are entitled to. There are no financial r easons t o leave money on the table, but take-up is nevertheless imperfect. Higher benefits substantially increase claiming across the income d istribution. We fur ther detect sizeable spill-over effects on subsequent take-up of low-income earners.

Keywords: Parental benefits; incomplete take-up; after-tax benefits (search for similar items in EconPapers)
JEL-codes: H24 J22 (search for similar items in EconPapers)
Pages: 59 pages
Date: 2023-12-20
New Economics Papers: this item is included in nep-lma and nep-pbe
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:ifauwp:2023_024

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