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ISER Working Paper Series 2006-12

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


Publication date

01 Apr 2006


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%.


Pensions and Poverty


working paper

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Related publications

  1. The Welfare Cost of Means-Testing: pensioner participation in income support

    Stephen Pudney, Monica Hernandez, and Ruth Hancock

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

    Monica Hernandez, Stephen Pudney, and Ruth Hancock

    1. Pensions
    2. Poverty


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