Estimating Models of Benefit Take-up
A review of how non take-up of state benefits has been studied by economists, focusing on examples from labour supply literature
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HM Revenue and Customs Working Paper 1b: Estimating Models of Benefit Take-up
This paper summarises the economic literature on modelling take-up, with a focus on income-related or work-related benefits or tax credits. It gives a framework for thinking about aggregate measures of take-up rates, and shows how existing studies differ from each other in their data requirements and modelling complexity. It also shows how models of non-take-up, when appropriate data are available, can account for measurement and expectational errors, and how they can value the costs of claiming and receiving some benefits.
This paper is part of the project called “Econometric Research: Impact of Working Families’ Tax Credit” funded by the Inland Revenue.