Who is screened out of social insurance programs by entry barriers? Evidence from consumer bankruptcies

Vyacheslav Mikhed and Barry Scholnick

No 15-40, Working Papers from Federal Reserve Bank of Philadelphia

Abstract: Entry barriers into social insurance programs will be effective screening devices if they cause only those individuals receiving higher benefits from a program to participate in that program. We find evidence for this by using plausibly exogenous variations in travel-related entry costs into the Canadian consumer bankruptcy system. Using detailed balance sheet and travel data, we find that higher travel-related entry costs reduce bankruptcies from individuals with lower financial benefits of bankruptcy (unsecured debt discharged, minus secured assets forgone). When compared across filers, each extra kilometer traveled to access the bankruptcy system requires approximately $11 more in financial benefits from bankruptcy. {{p}}Supersedes Working Paper 14-18

Keywords: Social insurance; Consumer bankruptcy; Filing costs; Entry barriers (search for similar items in EconPapers)
JEL-codes: D14 G23 G33 K35 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2015-10-22
New Economics Papers: this item is included in nep-ias, nep-lab and nep-law
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