Administrative Exclusion: Organizations and the Hidden Costs of Welfare Claiming

Abstract

Organizations operate as the gateway to public benefits. They are formally authorized to adjudicate claims, in the process interpreting and applying eligibility rules. Beyond their designated role, they also operate as informal gatekeepers, developing modes of operation that affect the ease or difficulty of claiming. Operational practices—both formally prescribed and informally created—can add hidden costs to claiming to the extent that they are complicated, confusing, or cumbersome. Individuals implicitly recognize these costs when they complain of being “tied up in red tape” or given the “bureaucratic run around.” This inquiry examines whether these types of hidden organizational costs can have systematic effects, resulting in administrative exclusion—that is, nonparticipation attributable to organizational factors rather than claimant preferences or eligibility status.

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