Non-take-up of social assistance during the covid-19 pandemic – a natural experiment of the tightening of access to social assistance in Switzerland
Creators: name: Hümbelin, Oliver
name: Sutter, Rulla
name: Lehmann, Olivier Tim
Publisher: name: (:unav)
Year: 2024

description: Social assistance programs are designed to aid individuals experiencing acute financial emergencies, typically when their financial situation falls below the poverty line. However, the efficacy of such programs is contingent on the beneficiaries' ability to access these services. The phenomenon of "hidden poverty," where eligible individuals do not claim social assistance, is increasingly recognized in Switzerland. This non-take-up of social assistance has been documented in studies across several Swiss cantons, highlighting various barriers including lack of knowledge, complex application processes, social and psychological hurdles, and legal frameworks. This study investigates whether the reform of the Foreigners and Integration Law (AFL) in Switzerland has impacted the non-take-up of social assistance. To measure non-take-up, the study links tax, population, and social assistance register data, enabling a simulation-based determination of eligibility according to legal standards. This methodology allows the differentiation between those who access social assistance and those who do not, despite being eligible. The analysis focuses on data from Basel-City, an urban area with a high proportion of foreign residents, over a five-year period (2016-2020). The dataset encompasses nearly the entire population of approximately 100,000 individuals annually, providing robust coverage. A difference-in-difference (DiD) approach is employed to examine the causal effects of the AFL reform on non-take-up rates. This quasi-experimental design compares changes over time between a treatment group affected by the reform and a control group that was not. Key assumptions for the DiD analysis include the parallel trend assumption and the absence of treatment anticipation. The results reveal that the non-take-up rate in Basel slightly decreased between 2016 and 2018, followed by a slight increase in 2019 and a significant rise in 2020. The number of people eligible for benefits decreased alongside the social assistance rate from 2016 to 2019, with 2020 being an exception where eligible beneficiaries increased despite a decline in the social assistance rate. The increase in non-take-up in 2020 is attributed to the Covid-19 pandemic. Further analysis using the DiD method indicates that the AFL reform had a significant impact on non-take-up rates, particularly among third-country nationals with a C permanent residence permit. For this group, the likelihood of not receiving benefits rose substantially from 26.7% in 2018 to 33.8% in 2020, marking a 7.1 percentage point increase, which was statistically significant when compared to other groups (EU/EFTA nationals with C status: +4.6 percentage points; third-country nationals with B status: +2.2 percentage points). In conclusion, the study demonstrates that legal reforms, specifically the AFL, significantly affect the non-take-up of social assistance among specific immigrant groups in Basel. This highlights the need for policymakers to consider the unintended consequences of legal frameworks on the accessibility of social benefits, particularly during periods of economic strain such as the Covid-19 pandemic.