Endogenizing take-up of social assistance in a microsimulation model
A case study for Germany

Wiemers, Jürgen

doi:10.34196/ijm.00115

Cited by 12 publications

(9 citation statements)

References 15 publications

(44 reference statements)

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“…Additionally, a working household head and owning a dwelling has a strong and significant negative impact on the welfare participation decision. This supports previous research by Wiemers [2015] and Bruckmeier et al [2013], who find comparable effects for Germany. After having discussed the determinants of non-take-up of ALGII benefits in this chapter, the next chapter looks at the policy implications based on these findings and builds on the microsimulation of non-take-up households to critically discuss the currently applied calculation procedure of the adult standard benefit rate.…”

Section: Linear Probability Model With Fixed Effectssupporting

confidence: 93%

“…Analyzing the rate of non-take-up of ALGII benefits in Germany over the years to 2014, I find substantial and time-stable results ranging from 54.0 to 57.7 percent with an average non-take-up rate of 55.7 percent for the period. Compared to the findings of Wiemers [2015] who conducted his analysis based on the same survey data for the years 2005 to 2011, results are in scale higher by about ten percentage points. However, non-take-up rates are considerably smaller than the findings of Frick and Groh-Samberg [2007], Kayser and Frick [2000] or Riphahn [2001] for the time before 2005.…”

Section: Contributionscontrasting

confidence: 63%

“…Moreover, a much debated topic is the endogeneity of the take-up decision with respect to the benefit amount. This is important for policy simulation, as Wiemers [2015] or Currie [2006] show in their work. Hernanz et al [2004] give an overview of non-take-up rates in member countries of the Organisation for Economic Co-operation and Development (OECD), finding estimates within a range of 0.4 to 0.8 for housing and social assistance benefits and 0.6 to 0.8 for unemployment benefits.…”

Section: Previous Findings and Methodological Approachesmentioning

confidence: 99%

“…Moreover, living in the East of Germany is used as a more general indicator for an overall worse labor-market situation [Wiemers, 2015] that is likely to prolong the period of receipt. However, it must be noted that the area of residence can also affect the attitudes towards the welfare state because of the different former political systems in the East and West.…”

Section: Proxy Variables For Utility and Costs Of Claimingmentioning

confidence: 99%

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Non-Take-Up of Means-Tested Social Benefits in Germany

Harnisch

2019

SSRN Journal

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This paper presents non-take-up rates of benefits from the German Income Support for Job Seekers scheme, called Unemployment Benefit II (Arbeitslosengeld II). Eligibility to these benefits is simulated by applying a microsimulation model based on data from the Socioeconomic Panel for the years 2005 to 2014. To ensure the quality of the results, feasible upper and lower bounds of nontake-up are shown for different simulation assumptions. By employing a binary choice framework, determinants of the decision (not) to take-up benefits are studied by means of a cross-sectional probit regression and a fixed effects linear probability model. The findings of this study indicate that rates of non-take-up are substantial and time-stable in the decade after the Hartz IV reform of 2005. On average, the share of households that do not claim benefits despite being eligible, amounts to 55.7 percent of all eligible households in that period. The issue of non-take-up has further important implications for the determination of the standard benefit rate. Since the legally defined calculation procedure does not account for non-take-up households in the reference group, the approximated consumption expenditure that is considered as necessary for a dignified life is calculated too low. The results of this study suggest that the legally defined monthly adult lump sum amount in the year 2014 would have been twelve euros higher if the issue of non-take-up was accounted for in the methodology. Based on the findings, the paper aims to give policy recommendations.

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Section: Linear Probability Model With Fixed Effectssupporting

confidence: 93%

Section: Contributionscontrasting

confidence: 63%

Section: Previous Findings and Methodological Approachesmentioning

confidence: 99%

Section: Proxy Variables For Utility and Costs Of Claimingmentioning

confidence: 99%

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Non-Take-Up of Means-Tested Social Benefits in Germany

Harnisch

2019

SSRN Journal

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“…Using the calibrated weights, more weight has been placed on low-income earners who are also the most likely material needs benefit recipients, and finally this led to overestimation of this transfer in terms of the amount of benefits received (19% and 27% in 2011 and 2012, respectively). These results are in line with the evidence documented in the empirical literature suggesting considerable non-take-up of means tested benefits (Wiemers, 2015or Matsaganis et al, 2008. In Slovak EUROMOD, MNB transfer is simulated differently compared to SIMTASK (see section 4.2.1).…”

Section: Aggregate Validationsupporting

confidence: 90%

Improving the Validity of Microsimulation Results: Lessons from Slovakia

Siebertova¹,

Svarda²,

Valachyova³

2015

IJM

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Distributional effects of macroeconomic shocks in real-time

et al. 2021

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The highly dynamic nature of the COVID-19 crisis poses an unprecedented challenge to policy makers around the world to take appropriate income-stabilizing countermeasures. To properly design such policy measures, it is important to quantify their effects in real-time. However, data on the relevant outcomes at the micro level is usually only available with considerable time lags. In this paper, we propose a novel method to assess the distributional consequences of macroeconomic shocks and policy responses in real-time and provide the first application to Germany in the context of the COVID-19 pandemic. Specifically, our approach combines different economic models estimated on firm- and household-level data: a VAR-model for output expectations, a structural labor demand model, and a tax-benefit microsimulation model. Our findings show that as of September 2020 the COVID-19 shock translates into a noticeable reduction in gross labor income across the entire income distribution. However, the tax benefit system and discretionary policy responses to the crisis act as important income stabilizers, since the effect on the distribution of disposable household incomes turns progressive: the bottom two deciles actually gain income, the middle deciles are hardly affected, and only the upper deciles lose income.

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Endogenizing take-up of social assistance in a microsimulation model A case study for Germany

Cited by 12 publications

References 15 publications

Non-Take-Up of Means-Tested Social Benefits in Germany

Non-Take-Up of Means-Tested Social Benefits in Germany

Improving the Validity of Microsimulation Results: Lessons from Slovakia

Distributional effects of macroeconomic shocks in real-time

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