Explaining Benefit Take-up Behavior – The Role of Financial Incentives

Olof Rosenqvist and Håkan Selin

No 11402, CESifo Working Paper Series from CESifo

Abstract: Take-up of social benefits is a central issue in poverty alleviation and fiscal evaluations of policy reforms. However, it is difficult to find exogenous variation in the benefit level, and little is therefore known about take-up responses to basic financial incentives. 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 reasons to leave money on the table, but take-up is nevertheless imperfect. Higher benefits substantially increase claiming across the income distribution. We further detect sizable spillover 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)
Date: 2024
New Economics Papers: this item is included in nep-lma
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_11402

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