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Welfare Stigma Allowing for Psychological and Cultural Effects. An Agent-Based Simulation Study

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  • Dalit Contini
  • Matteo Richiardi

Abstract

We investigate the effects of income support on unemployment and welfare dynamics when stigma is attached to welfare provision. Stigma has been modelled in the literature as a cost of entry into welfare. Allowing for psychological factors, we assume that with stigma welfare provision leads to lower search effectiveness; moreover, we allow for interaction among agents. Carrying out an agent-based simulation study, we find that welfare take-up rates decrease with stigma while welfare spells get longer. Unemployment rates are not monotonically related to the amount of stigma, implying that we can find higher levels of unemployment with stigma than with no stigma.

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Bibliographic Info

Paper provided by LABORatorio R. Revelli, Centre for Employment Studies in its series LABORatorio R. Revelli Working Papers Series with number 56.

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Length: 23 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:cca:wplabo:56

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Related research

Keywords: job-search; welfare dependence; stigma; Agent-Based modeling; longitudinal data.;

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  1. Rebecca M. Blank, 2002. "Evaluating Welfare Reform in the United States," Journal of Economic Literature, American Economic Association, vol. 40(4), pages 1105-1166, December.
  2. Robert Moffitt, 2001. "The Temporary Assistance for Needy Families Program," Economics Working Paper Archive 463, The Johns Hopkins University,Department of Economics.
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