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Does inconvenience explain low take-up? Evidence from unemployment insurance

Avraham Ebenstein and Kevin Stange ()

Journal of Policy Analysis and Management, 2010, vol. 29, issue 1, 111-136

Abstract: Application inconvenience is one popular explanation for why many individuals do not receive the social benefits for which they are eligible. Applications take time and some individuals may decide that the financial benefits do not outweigh these time costs. This paper investigates this explanation using cross-state variation in administrative changes that made applying for unemployment insurance (UI) benefits substantially more convenient over the past decade. We find that the introduction of phone- and Internet-based claiming did not have an appreciable impact on overall UI take-up, nor did it lead to a shift toward recipients that are higher income or likely to be receiving the maximum benefit amount. These findings are inconsistent with a time- and transaction-cost explanation for low take-up, since remote UI claiming is less time intensive. This suggests that reducing application barriers alone may not be an effective tool for increasing program participation. © 2010 by the Association for Public Policy Analysis and Management.

Date: 2010
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DOI: 10.1002/pam.20481

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Handle: RePEc:wly:jpamgt:v:29:y:2010:i:1:p:111-136