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

Abstract

State actions have been argued to impact the lives of citizens in general and government benefit recipients in particular. However, little is known about whether experiences of psychological costs among 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 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 is associated with reduced stress. Overall, our findings suggest that some psychological costs experienced by recipients can be immediately reduced if compliance demands are removed. We conclude by discussing the implications for research and practice.

Keywords: Administrative burden, Psychological costs, Experiment, Unemployment benefits, Target groups