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The Role of Stigma in the Design of Welfare Programs

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  • Tomer Blumkin
  • Yoram Margalioth
  • Efraim Sadka
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    Abstract

    We consider the notion of welfare stigma à la Besley and Coate (1992b). This stigma is attributed to welfare claimants by society when they are perceived as undeserving in the sense that they falsely claim to be eligible for welfare benefits. However, due to imperfect information, this stigma may be extended, with some probability, to all welfare claimants. We examine the implications of this kind of stigma for the design of welfare programs.

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    File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2008/wp-cesifo-2008-05/cesifo1_wp2305.pdf
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    Bibliographic Info

    Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2305.

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    Date of creation: 2008
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    Handle: RePEc:ces:ceswps:_2305

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    Related research

    Keywords: welfare; take up; targeting; inequality; stigma;

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    1. Ruth Hancock & Stephen Pudney & Geraldine Barker & Monica Hernandez & Holly Sutherland, 2003. "The take-up of multiple means-tested benefits by British pensioners. Evidence from the Family Resources Survey," Discussion Papers in Economics, Department of Economics, University of Leicester 03/7, Department of Economics, University of Leicester.
    2. Pudney, Stephen & Hancock, Ruth & Sutherland, Holly, 2004. "Simulating the reform of means-tested benefits with endogenous take-up and claim costs," ISER Working Paper Series 2004-04, Institute for Social and Economic Research.
    3. Nichols, Albert L & Zeckhauser, Richard J, 1982. "Targeting Transfers through Restrictions on Recipients," American Economic Review, American Economic Association, American Economic Association, vol. 72(2), pages 372-77, May.
    4. Angeletos, George-Marios & Alesina, Alberto, 2005. "Fairness and Redistribution," Scholarly Articles 4553009, Harvard University Department of Economics.
    5. Rebecca M. Blank & Patricia Ruggles, 1996. "When Do Women Use Aid to Families with Dependent Children and Food Stamps? The Dynamics of Eligibility Versus Participation," Journal of Human Resources, University of Wisconsin Press, vol. 31(1), pages 57-89.
    6. Henrik Jacobsen Kleven & Wojciech Kopczuk, 2008. "Transfer Program Complexity and the Take Up of Social Benefits," NBER Working Papers 14301, National Bureau of Economic Research, Inc.
    7. Mirrlees, James A, 1971. "An Exploration in the Theory of Optimum Income Taxation," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 38(114), pages 175-208, April.
    8. Laurence, JACQUET, 2006. "Optimal disability assistance when fraud and stigma matter," Discussion Papers (ECON - Département des Sciences Economiques), Université catholique de Louvain, Département des Sciences Economiques 2006052, Université catholique de Louvain, Département des Sciences Economiques.
    9. Besley, T. & Coate, S., 1990. "Understanding Welfare Stigma: Taxpayer Resentment And Statistical Discrimination," Papers, Princeton, Woodrow Wilson School - Discussion Paper 42, Princeton, Woodrow Wilson School - Discussion Paper.
    10. Yaniv, Gideon, 1997. "Welfare fraud and welfare stigma," Journal of Economic Psychology, Elsevier, Elsevier, vol. 18(4), pages 435-451, June.
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