The Effects of Administrative Burden on Program Equity and Performance: Evidence from a Natural Experiment in a Foreclosure Prevention Program

In this article, we examine the effects of reforms to reduce administrative burden in a foreclosure prevention program by streamlining the application process and reducing applicant wait times. We find that the reforms are associated with a significant 23 percent increase in the rate of benefit receipt and a 7.5 percent decrease in the foreclosure rate. These effects are even larger for applicants with more difficult-to- document hardship situations. However, we also find evidence of congestion, where the elimination of documentation requirements increased processing times for applicants, undoing some of the positive benefits. These findings suggest that shifting the documentation burden to the state without sufficiently expanding state capacity may substitute one form of administrative burden for another.