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To Claim or Not to Claim: Estimating Non-take-up of Social Assistance in Germany and the Role of Measurement Error

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  • Joachim R. Frick
  • Olaf Groh-Samberg

Abstract

Using representative micro data from the German Socio-Economic Panel Study (SOEP) for the year 2002, we analyse non-take-up behaviour of Social Assistance (SA) in Germany. According to our simulation as much as 67 percent of the eligible population did not claim SA in that year which is slightly higher than reported in previous work. We particularly emphasize the role of measurement error in estimating non-take-up. First, we consider misspecifications of the simulation model due, e.g., to households claiming to have received SA although not simulated as eligible ("beta-error"). Second, we employ sensitivity analyses revealing the impact of measurement errors in reported household income and wealth as well as in simulated needs. Misreported household incomes appear to have the greatest impact on the estimated non-take-up rates, as shown in Monte-Carlo-type simulations. Regression analysis of the potential determinants of non-take-up behaviour confirm that rational motives - i.e., the expected net utility from claiming - as well as stigma and other barriers play a crucial role in explaining the puzzle of large non-take-up rates of SA.

Suggested Citation

  • Joachim R. Frick & Olaf Groh-Samberg, 2007. "To Claim or Not to Claim: Estimating Non-take-up of Social Assistance in Germany and the Role of Measurement Error," Discussion Papers of DIW Berlin 734, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp734
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    References listed on IDEAS

    as
    1. Regina T. Riphahn, 2001. "Rational Poverty or Poor Rationality? The Take‐up of Social Assistance Benefits," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 47(3), pages 379-398, September.
    2. Wilde Joachim & Kubis Alexander, 2005. "Nichtinanspruchnahme von Sozialhilfe. Eine empirische Analyse des Unerwarteten / Non-take-up Behavior of Social Assistance in Germany. An Empirical Investigation of Unexpected Reactions," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 225(3), pages 91-117, June.
    3. Hilke Almut Kayser & Joachim R. Frick, 2000. "Take It or Leave It: (Non-) Take-up Behavior of Social Assistance in Germany," Discussion Papers of DIW Berlin 210, DIW Berlin, German Institute for Economic Research.
    4. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP) – Scope, Evolution and Enhancements," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(1), pages 139-169.
    5. Joachim R. Frick & Ulrich Rendtel & Gert G. Wagner, 1993. "Eine Strategie zur Kontrolle von Längsschnittgewichtungen am Beispiel des Sozio-ökonomischen Panels (SOEP)," Discussion Papers of DIW Berlin 80, DIW Berlin, German Institute for Economic Research.
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    More about this item

    Keywords

    Non-take-up; social assistance; measurement error; microsimulation; SOEP;
    All these keywords.

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General

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