Why don’t more people take up public services for which they are eligible?

One reason are the administrative obstacles and frictions that eligible individuals have to overcome to receive the public services. A paper by Herd and Moynihan (2025) in the Journal of Economic Perspectives provides an overview of the literature.

Such burdens are the experience of policy implementation as onerous, and arise via learning costs (knowing about the existence of and requirements of public services), compliance costs (time and effort spent dealing with bureaucratic demands, such as paperwork and documentation), and psychological costs (emotional responses to citizen-state interactions). Such frictions can substantially limit eligible peoples’ access to public services they want, would benefit from, and are legally entitled to receive. Those with the fewest resources, and the greatest needs, may struggle more to overcome burdens; the frictions thereby reinforcing existing inequality. As a research approach, administrative burden offers an intuitive and accessible way for policy actors and researchers to improve state capacity and the delivery of public services.

Some more detail on these costs:

Learning costs Time and effort expended to learn about the program or service, ascertaining eligibility status, the nature of benefits, conditions that must be satisfied, and how to gain access.Compliance costs Provision of information and documentation to demonstrate standing; financial costs to access services (such as fees, legal representation, travel costs); avoiding or responding to discretionary demands made by administrators; the amount of time spent on these processes.Psychological costs: Stigma arising from applying for and participating in an unpopular program; loss of autonomy that comes from intrusive administrative supervision; frustration at dealing with learning and compliance costs, unjust or unnecessary procedures; stresses that arise from uncertainty about whether a citizen can negotiate processes and compliance costs; fear about the coercive face of state power.

How big are these effects? In practice, very large. The paper shows the take-up rates of four large US government programs:

Supplemental Nutrition Assistance Program: 82%Medicaid: 50% for adults, 65% for childrenTemporary Assistance to Needy Families: 28% Earned Income Tax Credit: 77%

Can technology solve these problems? The answer is ‘yes’ in theory, but in practice it often the answer is ‘no’.

Indiana Governor Mitch Daniels contracted with IBM to use technology to resolve what he characterized as issues of fraud, error, and poor service. The use of automation allowed remote applications and approvals, which reduced compliance costs. But the resulting systems were inflexible and error-ridden, increasing burdens on clients and leading to large decline in enrollments for the Supplemental Nutrition Assistance Program, Temporary Assistance for Needy Families, and Medicaid. The declines were especially large in higher poverty counties…

The paper is interesting throughout and summarizes a lot of great evidence on the challenges administrative burdens pose for take-up of public services. You can read the full paper here.