Equilibrium effects of monitoring

Abstract

Monitoring and screening have been shown to be empirically important in reducing the use of social insurance benefits. Most previous studies have focused on ex-post effects of monitoring but ex ante effects from monitoring could potentially be even more important. This paper contributes to this literature by empirically studying whether monitoring in the Swedish temporary parental benefit program affects future take-up rates. We estimate the effects of being randomly selected into monitoring on the take-up of temporary parental benefits during the following year. The results suggest that parents who are selected into monitoring reduce their future benefit take-up.