The welfare cost of means-testing: pensioner participation in income support

Stephen Pudney, Monica Hernandez Alava and Ruth Hancock
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Ruth Hancock: Department of Health and Human Sciences, University of Essex, Colchester, UK, Postal: Department of Health and Human Sciences, University of Essex, Colchester, UK

Journal of Applied Econometrics, 2007, vol. 22, issue 3, 581-598

Abstract: We estimate parametric and semi-parametric binary choice models of benefit take-up by British pensioners and use a revealed preference argument to infer the cash-equivalent value of disutility arising from stigma or complexity of the claims process. These implicit costs turn out to be relatively small, averaging about £3-4 per week across Income Support recipients. Using the Foster-Greer-Thorbecke measure of poverty among pensioners, we find that allowing for implicit claim costs incurred by benefit recipients raises the measured degree of poverty by not more than 13%. Copyright © 2007 John Wiley & Sons, Ltd.

Date: 2007
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Related works:
Working Paper: The welfare cost of means-testing: pensioner participation in income support (2006)
Working Paper: The Welfare Cost of Means-Testing: Pensioner Participation in Income Support (2003)
Working Paper: The Welfare Cost of Means-Testing: Pensioner Participation in Income Support (2002)
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DOI: 10.1002/jae.940

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