Digital Eligibility Checks and Welfare Retrenchment in China: Can Proactive Welfare Administration Offset Their Exclusionary Effects?

ABSTRACT Against the backdrop of sustained retrenchment in China's Urban Minimum Livelihood Guarantee Scheme (Dibao), this study examines how digital eligibility verification systems and proactive identification mechanisms independently and jointly shape citizens' welfare receipt. Drawing on street‐level bureaucratic discretion and administrative burden theory, we hypothesise that digital verification has a negative relationship with welfare receipt, while proactive identification has a positive relationship with welfare access and may offset the above negative relationship. Using longitudinal administrative data from 2009 to 2023 and staggered difference‐in‐differences models, we find that digital eligibility verification systems are associated with lower Dibao receipt. Both forms of proactive identification (online tracking and offline seeking) are associated with higher Dibao receipt, but neither mechanism significantly mitigates the exclusionary effect of digital verification. By identifying both a key driver of and potential responses to Dibao retrenchment, this study contributes to research on welfare retrenchment, digital welfare and proactive public services and offers policy‐relevant insights for addressing the continued decline in Dibao coverage.