Operational research in the evaluation of social security benefit policies

Abstract

This thesis makes it possible for future reforms of the social security system to be based on the best available information. An approach to benefit policy analysis is defined and a technique for processing available data as required is identified. Progress on evaluating policies more faithfully in accord with expected performance rather than assuming perfect implementation is made. Having reviewed the development of the social security system and previous contributions to benefit policy analysis the requirements of an information system are defined. Available data sources are evaluated. This analysis highlights the complementary nature of the qualities of the Family Expenditure Survey and specialised sources. The use of iterative proportional fitting procedures to combine these sources in such a way as to exploit their strengths and minimise the impact of their weaknesses is advocated. Validation tests show the approach results in good estimates. Furthermore the approach is easy to understand and lies well in an analytic process geared towards increasing involvement of non-technical personnel. The same approach can be used to analyse the alternative benefit regimes for the distributional implications of hypothesised trends in aggregate variables. The need to consider operational issues when analysing policies is recognised. Two aspects of this problem are considered. An analysis of appeals data led to rankings of aspects of the benefit entitlement assessment procedure in terms of difficulty caused and persistence with which problems arose. The second analysis is a pilot study of inter-regional differences in population characteristics and aspects of benefit implementation to identify ways of improving the operational system generally. An important aspect of this analysis is the presentation of data on computer drawn maps - a further attempt to increase participation in the analytic process. Further development of this work should enable the evaluation of policy alternatives in terms of expected performance rather than on the assumption of perfect implementation