Reducing Compliance Demands in Government Benefit Programs Improves the Psychological Well-Being of Target Group Members

Abstract

State actions impact the lives of citizens in general and government benefit recipients in particular. However, little is known about whether experiences of psychological costs among benefit recipients can be relieved by reducing compliance demands in interactions with the state. Across three studies, we provide evidence that reducing demands causes relief. In a survey experiment, we show that psychological costs experienced by Danish unemployment insurance recipients change in response to information about actual reduced compliance demands. In two field studies, we exploit survey data collected around a sudden, exogenous shock (the COVID-19 lockdown of Danish society in March 2020), which led to immediate reductions in compliance demands in Denmark’s active labor market policies. We test whether two groups of benefit recipients experienced reduced psychological costs in response to these sudden reductions in compliance demands imposed by the state. Across all studies, we find that the reduction of compliance demands is associated with an increased sense of autonomy, and in two of the three studies it is associated with reduced stress. Overall, our findings suggest that psychological costs experienced by benefit recipients are indeed affected by state actions in the form of compliance demands.

Emergency-aid for self-employed in the Covid-19 pandemic: A flash in the pan?

“…Secondly, we investigate the impact of variations in the speed of processing the applications and paying out the emergency-aid, taking a procedural utility and administrative burden perspective on public interventions ( Block and Koellinger, 2009 , Frey et al, 2004 ). The results of our study imply that program impacts during a crisis do not just depend on its content but also on its processing speed associated, reflecting stress-induced waiting costs resulting from uncertainty ( Baekgaard et al, 2021 , Greco and Roger, 2003 , Monat et al, 1972 ). Thirdly, we analyze effect heterogeneities with respect to various individual-level variables, such as risk-tolerance or educational attainment.…”

‘I don’t know nothing about that’: How “learning costs” undermine COVID-related efforts to make SNAP and WIC more accessible

“…Recent scholarship recognizes the need to understand mechanisms of administrative burden (Peeters, 2020), particularly from the perspective of clients as they work to gain information about how to access and use benefits (Masood & Azfar Nisar, 2021). During the COVID-19 pandemic, scholars continue to question the mechanisms that create administrative burdens, demonstrating the relationship between compliance and psychological costs (Baekgaard et al, 2021) and how individuals experience barriers to public assistance programs (Camillo, 2021). In fact, clients must overcome learning hurdles by developing awareness of programs and their rules even before confronting barriers to compliance such as providing documentation (see Camillo, 2021).…”

Mitigating Psychological Costs—The Role of Citizens’ Administrative Literacy and Social Capital

“…For instance, Hattke, Hensel, and Kalucza (2020) show that encountering administrative burdens and red tape causes negative emotional responses, such as frustration and confusion. Others find that the easing of compliance demands in public programs immediately reduces the experiences of stress and autonomy loss among its recipients (Bækgaard et al 2021). Combined with social stigma often associated with certain types of welfare programs (Buss 2019; Caswell, Larsen, and Sieling‐Monas 2015; Currie 2006), administrative burdens may also have unintended behavioral side‐effects on program success and recipients wider democratic participation (Larsen 2019; Moynihan and Soss 2014).…”

“…However, in their original proposition, they include stress, stigma, and loss of autonomy as exemplary psychological costs of administrative burdens. Researchers have examined whether onerous experiences of public programs lead citizens to feel more stress, stigma, and autonomy loss (e.g., Bækgaard et al 2021). From a COR theory perspective, however, these three psychological costs are not equal, nor should they be thought of as parallel outcomes.…”