Abstract

The international literature studies take-up behavior of eligible populations in order to evaluate the effectiveness of government programs. A major challenge in this literature is measurement error regarding take-up behavior. Measurement error is typically addressed by structural assumptions in the modelling framework. In our data, we observe both, actual welfare receipt and respondents' survey information on their take-up. This allows us to observe measurement errors that other researchers have to estimate. We investigate how survey misreporting biases the estimates of the magnitude and patterns of benefit take-up. The findings suggest that the extent of measurement error can be substantial. It varies with the characteristics of the misreporting population and is associated with the drivers of underreporting.