Poor benefits. The role of financial stress in the non-take-up of social welfare

    9 July 2024

    LISS Grant 2020. Authors: Olaf Simonse, Wilco van Dijk, Lotte van Dillen (Leiden University – Faculty of Social Sciences)

    Many poor households forego social welfare despite eligibility, which keeps them in a cycle of poverty. Traditional theories focusing on the economic costs and benefits of claiming social welfare do not provide a satisfactory explanation for high levels of non-take-up. The current study aims to unravel the psychological costs of non-take-up of social benefits. We propose that stigma, fear of reclaims, and perceived complexity negatively impact the perceived utility of claiming benefits. These mechanisms are strengthened by the financial stress that low¬-income households experience. This, ironically, implies that those who are most in need of social welfare experience the highest thresholds for claiming it. We intend to connect survey data on the psychological costs for claiming social welfare with existing economic LISS-data to determine eligibility. The results of this study will be relevant for policymakers in the field of poverty reduction and debt prevention and will provide directions for further research.

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