Refereed Journal

Title

Simulating the Reform of Means-Tested Benefits with Endogenous Take-Up and Claim Costs

Authors

Stephen Pudney , Ruth Hancock , Holly Sutherland

Journal

Oxford Bulletin of Economics and Statistics

ISSN

0305-9049

Volume/Edition

68 2

Published Date

2006-06-01

Abstract

Microsimulation models are commonly used to examine the distributional impact of reforms of the means-tested benefit system. Take-up behaviour is related to the level of entitlement, so reform may induce changes in take-up. We develop a stochastic simulation method and apply it to a probit model of Income Support take-up by British pensioners. The method allows us to adjust net income for the welfare losses due to tangible or intangible claim costs. Endogenous take-up and claim costs both have an important impact on the simulated outcomes of the policy reform.

Non-Technical Summary

No Summary available

Also published as:

1. Stephen Pudney
,
2. Ruth Hancock
,
3. Holly Sutherland

Simulating the Reform of Means-Tested Benefits with Endogenous Take-Up and Claim Costs ISER Working Paper number: 2004-04, 2004

1. Stephen Pudney
,
2. Ruth Hancock
,
3. Holly Sutherland

Simulating the Reform of Means-Tested Benefits with Endogenous Take-Up and Claim Costs presented in Italian Congress of Econometrics and Empirical Economics, Venezia, , 2005-01-24