Complexity and benefit take-up: Empirical evidence from the Finnish homecare allowance

Tomer Blumkin, Tuomas Kosonen and Kaisa Kotakorpi
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Tomer Blumkin: Ben Gurion University and CESifo
Kaisa Kotakorpi: VATT, University of Turku and CESifo

No 123, Discussion Papers from Aboa Centre for Economics

Abstract: We analyse to what extent the complexity of benefit rules affects take-up in a setting where the effects of complexity can be separated from other potential causes of non-take-up. The benefit we study is extensively used by individuals from all socioeconomic groups, namely the municipal supplement to the child homecare allowance in Finland. We use individual-level data on mothers of young children together with municipal-level data on the application rules for the benefit. Variation in the supplement rules between municipalities and over time is used to estimate the causal effect of complexity on take-up. We find in a differences-in-differences setting that complexity has a very large effect on take-up. Complex application procedures cause individuals to forego a benefit of approximately 200 \texteuro \ per month, potentially for 2 years.

Keywords: benefit take-up; complexity; childcare (search for similar items in EconPapers)
JEL-codes: H31 H53 I38 (search for similar items in EconPapers)
Pages: 22
Date: 2018-10
New Economics Papers: this item is included in nep-eur
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Citations: View citations in EconPapers (1)

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