Non-Take-Up of Unemployment Benefit II in Germany: A Longitudinal Perspective Using Administrative Data

Abstract

Extensive research demonstrates that many households eligible for means-tested benefits do not claim them, a phenomenon known as non-take-up. Long-term factors can substantially affect this decision. For example, households facing income instability may anticipate only temporary eligibility, increasing non-take-up. Past benefits experience can have varied effects: familiarity with the claiming process may lower informational and transactional barriers, while negative experiences could increase perceived stigma. Despite the potential relevance of longitudinal aspects, evidence on their influence remains limited. This study addresses this gap by incorporating long-term factors into the analysis of non-take-up of Unemployment Benefit II (UB II), Germany's basic means-tested welfare programme. Using data from the German Panel Study Labour Market and Social Security from 2008 to 2020, linked with administrative data from Germany's Federal Employment Agency, this study reconstructs households' benefit receipt and income histories, even during non-survey periods. The use of administrative data also mitigates bias from self-reported benefit receipt. Household eligibility for UB II is simulated using GETTSIM, an open-source microsimulation model. Findings indicate that long-term factors are significantly associated with the probability of claiming UB II. A longer history of benefit receipt is associated with a higher probability, whereas higher income potential and positive income shocks are associated with a lower probability of claiming. Accounting for long-term factors substantially changes the estimated associations of traditionally used correlates of non-take-up, indicating a potential misspecification in existing models that neglect them. The analysis is descriptive throughout, documenting conditional associations rather than causal effects.