econ03-2.pdf (491.93 kB)
The Welfare Cost of Means-Testing: Pensioner Participation in Income Support
reportposted on 2009-04-28, 15:41 authored by Stephen Pudney, Monica Hernandez, Ruth Hancock
We estimate parametric and semi-parametric binary choice models of benefit take-up by British pensioners and develop methods, based on the compensating variation, of inferring the cash-equivalent value of disutility arising from stigma or complexity of the claims process, taking account of the self-selection induced by take-up. We extend this to incorporate the claim costs borne by welfare-recipients into the measurement of pensioner poverty. We find that allowing for implicit claim costs in this way has a non-negligible impact on poverty measurement.