Non-take-up of in-work benefits: determinants, benefit erosion and indexing

Diego Muñoz-Higueras, Stephan Köppe, Rafael Granell and Amadeo Fuenmayor
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Diego Muñoz-Higueras: Department of Applied Economics, University of Valencia, Valencia, Spain
Stephan Köppe: School of Social Policy Social Work and Social Justice, University College Dublin, Dublin, Ireland
Rafael Granell: Department of Applied Economics, University of Valencia, Valencia, Spain
Amadeo Fuenmayor: Department of Applied Economics, University of Valencia, Valencia, Spain

Journal for Labour Market Research, 2024, vol. 58, issue 1, Article 22

Abstract: "Non-take-up of welfare schemes is a key concern of policy effectiveness. Building on studies that have shown the low take-up of minimum income schemes, our case study of Ireland’s Working Family Payment is the first to analyse non-take-up of an in-work benefit and its determinants with a special focus on labor market factors. Based on EU-SILC (2014–2019) we estimate a non-take-up rate between 63 and 76%, which poses a major obstacle for effective poverty prevention. Moreover, we stress that non-take-up of in-work benefits differs to minimum income schemes. We provide new evidence on how labor market characteristics play an important role in explaining non-take-up, especially self-employment and the interaction with unemployment benefits. Benefit erosion is a key factor in declining eligibility, which should be addressed by indexing wages and prices. Furthermore, we propose policy reforms around automatic enrolment or tax credits to mitigate non-take-up and alleviate in-work poverty." (Author's abstract, IAB-Doku) ((en))

Keywords: Irland; Armut; Armutsbekämpfung; Aufstocker; Erwerbstätige; Europäisches Haushaltspanel; Familieneinkommen; Inanspruchnahme; Informationsbedarf; Kleinstunternehmen; Leistungsbezug; Leistungsempfänger; Lohnsubvention; Niedrigeinkommen; Niedriglohn; Anspruchsvoraussetzung; Geringverdiener; Reform; Selbständige; Sozialleistungen; Arbeitskraftunternehmer; 2014-2019 (search for similar items in EconPapers)
JEL-codes: C15 D04 H31 H53 I38 J38 (search for similar items in EconPapers)
Date: 2024-11-07
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DOI: 10.1186/s12651-024-00385-8

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