American Economic Journal:
Economic Policy
ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)
Transfer Program Complexity and the Take-Up of Social Benefits
American Economic Journal: Economic Policy
vol. 3,
no. 1, February 2011
(pp. 54–90)
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)Citation
Kleven, Henrik Jacobsen, and Wojciech Kopczuk. 2011. "Transfer Program Complexity and the Take-Up of Social Benefits." American Economic Journal: Economic Policy, 3 (1): 54–90. DOI: 10.1257/pol.3.1.54JEL Classification
- D04 Microeconomic Policy: Formulation; Implementation; Evaluation
- D82 Asymmetric and Private Information
- H23 Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- I18 Health: Government Policy; Regulation; Public Health
- I38 Welfare and Poverty: Government Programs; Provision and Effects of Welfare Programs
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