Work

Transfer Program Complexity and the Take-Up of Social Benefits

Year: 2011

Type: article

Abstract: We model complexity in social programs as a by-product of the screening process. While a more rigorous screening process may improve targeting efficiency, the associated complexity is costly to applicants and induces incomplete take-up. We integrate the study of take-up with the study of rejection (Type I) and award (Type II) errors, and characterize optimal programs when policy makers choose screening intensity (and complexity), an eligibility rule, and a benefit level. Consistent with many real-world programs, optimal programs feature high complexity, incomplete take-up, classification errors of both Type I and II and, in some cases, “excessive” benefits. (JEL D04, D82, H23, I18, I38)

Source: American Economic Journal Economic Policy

DOI: 10.1257/pol.3.1.54

Authors: Henrik Jacobsen Kleven, Wojciech Kopczuk

Institutions: Centre for Economic Policy Research, London School of Economics and Political Science, Center for Economic and Policy Research, Columbia University

Language: English

Topic: Poverty, Education, and Child Welfare

Subfield: Development

Field: Social Sciences

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W1975668613

FWCI: 19.43

Cites: 71

Cited by: 208

Related to: 10