Low take-up of social benefits and what local municipalities think about it in Hungary

Abstract The study examines how local municipalities evaluate the current aid system. It focuses on Borsod-Abaúj-Zemplén County, Hungary, which has long been affected by poverty and the related social and economic problems to a degree that exceeds the national average. The paper focuses on the low take-up of social benefits, an issue that risks missing the main purpose of the welfare system. The chosen county has a special position because of two reasons. On the one hand, it includes many small villages where the representatives of the municipalities “know” every inhabitant. On the other hand, moonlighting is widespread in small villages. Due to these specificities, I conducted a survey in 2022 and 2023, asking representatives from 33 local municipalities of small villages for their opinions on the low take-up of social benefits. I approached 19 mayors, and 12 other representatives who possess expertise on the subject. According to the survey results, municipalities believed that horizontal efficiency was not achieved, and it is mainly due to disturbances on the demand side. The main cause of non-take-up is the stigmatizing nature of support. Secondly, people perceive information costs as a deterrent to making claims. The third main obstacle to application was the complexity of the application process. Therefore, improving the targeting process is necessary to boost the take-up rate. The research results are relevant for policymakers, researchers, and service providers.