Smaller net or just fewer to catch? Disentangling the causes for the varying sizes of minimum income schemes

Abstract

Abstract The number of social assistance recipients varies significantly between welfare states. Social assistance is a last‐resort residual benefit, so a high number of receipts may be related to policies for first‐tier benefits, social assistance and their implementation, as well as need factors (unemployment rate and low income). Considering the strong political will to diminish the receipt of last‐resort benefits, we demonstrated a way to decompose the reasons for eligibility in a cross‐national analysis of two Nordic countries, namely Finland and Sweden. By using administrative register microdata, eligibility simulations and policy swaps, we found that the legislative features of social assistance, such as more extensive benefit norms and earning disregard, contribute to Finland's higher eligibility rate and likely explain some of the reasons for its higher number of recipients. Finland also exhibited lower non‐take‐up rates among those eligible, which implies better access to benefits than in Sweden.