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Simulating the reform of means-tested benefits with endogenous take-up and claim costs

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  • Pudney, Stephen
  • Hancock, Ruth
  • Sutherland, Holly
Abstract
Microsimulation models are commonly used to examine the distributional impact of reforms of the means‐tested benefit system. Take‐up behaviour is related to the level of entitlement, so reform may induce changes in take‐up. We develop a stochastic simulation method and apply it to a probit model of ‘income support’ take‐up by the UK pensioners. The method allows us to adjust net income for the welfare losses because of tangible or intangible claim costs. Endogenous take‐up and claim costs both have an important impact on the simulated outcomes of the policy reform.
(This abstract was borrowed from another version of this item.)

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  • Pudney, Stephen & Hancock, Ruth & Sutherland, Holly, 2004. "Simulating the reform of means-tested benefits with endogenous take-up and claim costs," ISER Working Paper Series 2004-04, Institute for Social and Economic Research.
    • Handle: RePEc:ese:iserwp:2004-04
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    References listed on IDEAS

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