Information Costs and the Non‐Take‐Up of Social Benefits: A Detailed Exploration of Belgian Social Assistance

Abstract

ABSTRACTIn many European countries, about half of those eligible for means‐tested social benefits, do not receive the benefits to which they are entitled. In the literature, a wide range of factors have been identified that potentially contribute to the non‐take‐up of social benefits. Particular attention has been paid to factors that relate to the claimants themselves, including the experienced or perceived costs associated with claiming benefits and negative attitudes towards claiming benefits. However, the theory on the conditions under which claiming costs matter is still underdeveloped, while the evidence on the relative importance of claiming costs is to a large extent indirect and based on proxy variables. In this paper, we measure individual and household (dis)incentives for taking up social assistance benefits more directly, and evaluate to what extent they are associated with non‐take‐up of social assistance for people at active age in Belgium. To do so, we use a combination of register data and data from the TAKE survey, a new representative survey tailored for studying the determinants of non‐take‐up in Belgium. Combining both sources of information and detailed simulations of eligibility, we show that information costs are much better at predicting non‐receipt of social assistance than process costs and stigma. While attitudes towards the receipt of benefits are of little consequence, optimism about the future seems to matter more, as does the level of material deprivation experienced by the household. We also explore under what conditions information costs matter most. While findings are not very robust, our data suggest that the importance of information costs is mediated by the level optimism about the future and changes in household composition that act as trigger events.