Non-Take-Up of Social Assistance - On the relevance of stigma effects

Hümbelin, Oliver (30 August 2016). Non-Take-Up of Social Assistance - On the relevance of stigma effects. In: Economic inequalities, deprivation, and poverty: ISA RC28 Summer Meeting. Universität Bern. 29.-31. Aug. 2016.

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Most western societies provide social assistance for households that lack the resources to maintain a minimum living standard. However, redistributive effectiveness of such policies can be compromised if eligible recipients do not claim the benefits they are entitled to. If non-take-up rates are high, it is questionable whether anti-poverty schemes are designed adequately. This paper follows two main goals. First, although non-take-up rates may be assumed to be high also in Switzerland, previous estimates for Switzerland are problematic due to methodological shortcomings (most important missing information on wealth). This study provides results based on an alternative estimation approach using tax data from the canton of Bern. Second, I exploit regional variation in non-take-up rates to study potential stigma effects. As expected, non-take-up rates decrease when wealth is controlled for; the non-take up estimation drops from 51.7 percent (without wealth) to 23.6 percent (including wealth). There is substantial regional variance, that is used for further analyses by fitting a multilevel-model with municipalities as level-1 and social service regions as level-2 units. Non-take up indeed can be related to several variables that theoretically can be associated with different regional norms (rural vs urban areas and French speaking vs German speaking part). Social norms are proxied with voters share for parties that have “social assistance” explicitly on their political agenda. As theoretically expected, non-take-up rises with rising support for the restrictive Swiss People's Party (SVP) and falls with rising support for the social democratic Party (SP). These findings are in line with stigma theory, but should not be interpreted as a final test of the assumed relationship.

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