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Non-Take-Up of Means-Tested Social Benefits in Germany

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  • Michelle Harnisch

Abstract

This paper presents non-take-up rates of benefits from the German Income Support for Job Seekers scheme, called Unemployment Benefit II (Arbeitslosengeld II ). Eligibility to these benefits is simulated by applying a microsimulation model based on data from the Socio-economic Panel for the years 2005 to 2014. To ensure the quality of the results, feasible upper and lower bounds of nontake-up are shown for different simulation assumptions. By employing a binary choice framework, determinants of the decision (not) to take-up benefits are studied by means of a cross-sectional probit regression and a fixed effects linear probability model. The findings of this study indicate that rates of non-take-up are substantial and time-stable in the decade after the Hartz IV reform of 2005. On average, the share of households that do not claim benefits despite being eligible, amounts to 55.7 percent of all eligible households in that period. The issue of non-take-up has further important implications for the determination of the standard benefit rate. Since the legally defined calculation procedure does not account for non-take-up households in the reference group, the approximated consumption expenditure that is considered as necessary for a dignified life is calculated too low. The results of this study suggest that the legally defined monthly adult lump sum amount in the year 2014 would have been twelve euros higher if the issue of non-take-up was accounted for in the methodology. Based on the findings, the paper aims to give policy recommendations.

Suggested Citation

  • Michelle Harnisch, 2019. "Non-Take-Up of Means-Tested Social Benefits in Germany," Discussion Papers of DIW Berlin 1793, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp1793
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    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.616586.de/dp1793.pdf
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    References listed on IDEAS

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    Cited by:

    1. Munoz de Bustillo Llorente Rafael & FERNANDEZ MACIAS Enrique & GONZALEZ VAZQUEZ Ignacio, 2020. "Universality in Social Protection: An Inquiry about its Meaning and Measurement," JRC Research Reports JRC122953, Joint Research Centre.
    2. Gyubeom Park & Kichan Yoon & Munjae Lee, 2021. "Regional Factors Influencing Non-Take-Up for Social Support in Korea Using a Spatial Regression Model," SAGE Open, , vol. 11(4), pages 21582440211, December.
    3. Céline Marc & Mickaël Portela & Cyrine Hannafi & Rémi Le Gall & Antoine Rode & Stéphanie Laguérodie, 2022. "Non-take-up of minimum social benefits: quantification in Europe," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-04082347, HAL.
    4. Rueß, Stefanie & Schneider, Gerald & Vogler, Jan, 2024. "Priming and prejudice: Experimental evidence on negative news frames and discrimination in German welfare offices," Working Papers 34, University of Konstanz, Cluster of Excellence "The Politics of Inequality. Perceptions, Participation and Policies".

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    More about this item

    Keywords

    Welfare participation; take-up; social policy; microsimulation;
    All these keywords.

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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