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Welfare Stigma or Information Sharing? Decomposing Social Interactions Effects in Social Benefit Use

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Author Info
Ethan Cohen-Cole ()
Giulio Zanella ()

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Abstract

Empirical research has shown that social interactions affect the use of public benefits, thus providing evidence in favor of the idea of “welfare cultures.” In this paper we take the next crucial step by separately identifying the role of social stigma and information sharing in welfare participation, using Census data. We argue that the stigma vs. information distinction has possibly important consequences. Separate identification exploits the asymmetry between association and mere spatial proximity: we asume that while information is transmitted within groups, stigma works across groups as well. We also allow for heterogeneity of social effects across different race-ethnic groups and find non-trivial differences. We find that while the information channel is more important than stigma, White Americans appear to perceive stigma more from otherWhite Americans than by other races, and Black and Hispanic Americans appear to respond principally to stigma from external groups

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Paper provided by Department of Economics, University of Siena in its series Department of Economics University of Siena with number 531.

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Date of creation: Mar 2008
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Handle: RePEc:usi:wpaper:531

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Related research
Keywords: social interactions neighborhood effects welfare stigma

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Find related papers by JEL classification:
I30 - Health, Education, and Welfare - - Welfare and Poverty - - - General
Z13 - Other Special Topics - - Cultural Economics - - - Social Norms and Social Capital; Social Networks Economic Anthropology

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    Other versions:
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    Other versions:
  5. Brock, William A. & Durlauf, Steven N., 2001. "Interactions-based models," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 54, pages 3297-3380 Elsevier. [Downloadable!] (restricted)
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    Other versions:
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  13. Assar Lindbeck & Sten Nyberg & Jšrgen W. Weibull, 1999. "Social Norms And Economic Incentives In The Welfare State," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 1-35, February. [Downloadable!] (restricted)
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