New Rich or Old Poor: Poverty, Take‐Up and the Indexation of the State Pension

The take-up of means-tested benefits, 1984-90

“…These are recurring findings in subsequent work. Fry and Stark (1987) looked at supplementary benefit in 1984. Compared with Blundell et al ( 1988), this paper used re-estimated entitlements after problems were discovered with the FES SB receipt data (this is discussed further in Chapter 3 below).…”

“…Also, the long-term unemployed were significantly more likely and part-time workers less likely to take up than the average. Fry and Stark ( 1991) showed how these econometric models could be used in a tax and benefit model. We examined castings of pension increases with and without take-up corrections.…”

“…Apart from the complications arising from the use of two different sources of data, which would make much of our econometric work impossible, this differs from the measure used in Fry and Stark (1987) in two respects. The number receiving a benefit may include some people who in their current circumstances are not entitled.…”

“…In contrast, Fry and Stark ( 1987) measure take-up as the proportion of those with calculated entitlement who also receive benefit, thereby excluding recipients without calculated entitlement. Abstracting from other possible errors, to the extent that members of this group represent mistakes in the measurement of entitlement (i.e.…”

“…they are in fact entitled), this measure will be 'too low'; to the extent that there are genuine cases of receipt without current entitlement, the DSS measure will be 'too high'. In what follows, we present FES-based take-up rates that both exclude this group, as in Fry and Stark (1987), ('XNER' -excluding non-entitled recipients) and include them as entitled as well as receiving ('INER'-including non-entitled recipients).…”