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Non-take-up of in-work benefits: determinants, benefit erosion and indexing

Year: 2024

Type: article

Abstract: Non-take-up of welfare schemes is a key concern of policy effectiveness. Building on studies that have shown the low take-up of minimum income schemes, our case study of Ireland’s Working Family Payment is the first to analyse non-take-up of an in-work benefit and its determinants with a special focus on labour market factors. Based on EU-SILC (2014–2019) we estimate a non-take-up rate between 63 and 76%, which poses a major obstacle for effective poverty prevention. Moreover, we stress that non-take-up of in-work benefits differs to minimum income schemes. We provide new evidence on how labour market characteristics play an important role in explaining non-take-up, especially self-employment and the interaction with unemployment benefits. Benefit erosion is a key factor in declining eligibility, which should be addressed by indexing wages and prices. Furthermore, we propose policy reforms around automatic enrolment or tax credits to mitigate non-take-up and alleviate in-work poverty.

Source: Journal for Labour Market Research

DOI: 10.1186/s12651-024-00385-8

Authors: Diego Muñoz-Higueras, Stephan Köppe, Rafael Granell, Amadeo Fuenmayor

Institutions: Universitat de València, University College Dublin

Language: English

Topic: Gender, Labor, and Family Dynamics

Subfield: Gender Studies

Field: Social Sciences

Domain: Social Sciences

SDGs: No poverty, Decent work and economic growth, Reduced inequalities

Open Access status: diamond

Funder: Generalitat Valenciana