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Incomplete program take-up during a crisis: evidence from the COVID-19 shock in one U.S. state
Marianne Bitler1,2,3, Jason Cook2,4,5, Danea Horn6
1Department of Economics, University of California-Davis, Davis, CA USA.
International Tax and Public Finance
|October 17, 2022
Summary
Many eligible individuals do not participate in U.S. social safety net programs. Lack of knowledge, application difficulties, and stigma hinder participation in programs like Unemployment Insurance (UI).
Area of Science:
- Social Policy Research
- Public Health Economics
- Behavioral Economics
Background:
- The U.S. social safety net, comprising means-tested assistance and social insurance, exhibits incomplete participation among eligible individuals.
- Existing research attributes low program uptake to both neoclassical and behavioral science factors.
- The COVID-19 pandemic prompted significant governmental relief efforts, necessitating an examination of their accessibility and effectiveness.
Purpose of the Study:
- To investigate the response of social safety net programs to the COVID-19 pandemic in Utah.
- To identify key barriers to participation in major relief programs, including Unemployment Insurance (UI), Supplemental Nutrition Assistance Program (SNAP), and Economic Impact Payments (EIPs).
- To assess the role of need, information gaps, administrative burdens, and stigma in program non-participation.
Main Methods:
- Utilized newly collected survey data from Utah, focusing on per capita participation due to eligibility data limitations.
- Collected data on income, demographics, program usage, hardship measures, and reasons for non-participation in UI, SNAP, and EIPs.
- Analyzed factors such as need, lack of information, transaction costs, administrative burden, stigma, and eligibility as potential barriers.
Main Results:
- Lack of knowledge about programs was a significant barrier to participation.
- Difficulties encountered during the application process deterred individuals from enrolling.
- Stigma associated with the Unemployment Insurance (UI) program contributed to lower participation rates.
Conclusions:
- Barriers to social safety net program participation extend beyond mere eligibility, encompassing informational and procedural challenges.
- Addressing knowledge gaps, simplifying application processes, and mitigating program-specific stigma are crucial for improving access to essential support.
- Findings highlight the need for targeted interventions to enhance the effectiveness and reach of social safety net programs during crises.
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