Scandinavian Working Papers in Economics
Working Paper Series,
IFAU - Institute for Evaluation of Labour Market and Education Policy
No 2023:24: Explaining benefit take-up behavior – the role of incentives and habits
Olof Rosenqvist () and Håkan Selin
Additional contact information
Olof Rosenqvist: IFAU - Institute for Evaluation of Labour Market and Education Policy, Postal: Institute for Evaluation of Labour Market and Education Policy, P O Box 513, SE-751 20 Uppsala, Sweden
Håkan Selin: IFAU - Institute for Evaluation of Labour Market and Education Policy, Postal: Institute for Evaluation of Labour Market and Education Policy, P O Box 513, SE-751 20 Uppsala, Sweden
Abstract: Take-up of social benefits is a central issue in poverty alleviation and fis cal evaluations of policy reforms. However, it is difficult t o fi nd exogenous variation in the benefit level, and little is therefore known about take up responses to basic financial i ncentives. We exploit large and plausibly random variation in levels of ”flat rate parental leave benefits”, which all Swedish parents are entitled to. There are no financial r easons t o leave money on the table, but take-up is nevertheless imperfect. Higher benefits substantially increase claiming across the income d istribution. We fur ther detect sizeable spill-over effects on subsequent take-up of low-income earners.
Keywords: Parental benefits; incomplete take-up; after-tax benefits
Language: English
59 pages, December 20, 2023
Full text files
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