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)
Kleven, Henrik Jacobsen, and Wojciech Kopczuk.
"Transfer Program Complexity and the Take-Up of Social Benefits."
American Economic Journal: Economic Policy,
Microeconomic Policy: Formulation; Implementation; Evaluation
Asymmetric and Private Information
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Health: Government Policy; Regulation; Public Health
Welfare and Poverty: Government Programs; Provision and Effects of Welfare Programs