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

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  • Ethan Cohen-Cole
  • Giulio Zanella

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

Suggested Citation

  • Ethan Cohen-Cole & Giulio Zanella, 2008. "Welfare Stigma or Information Sharing? Decomposing Social Interactions Effects in Social Benefit Use," Department of Economics University of Siena 531, Department of Economics, University of Siena.
  • Handle: RePEc:usi:wpaper:531
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    References listed on IDEAS

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    Cited by:

    1. Stephen L. Ross, 2009. "Social Interactions within Cities: Neighborhood Environments and Peer Relationships," Working papers 2009-31, University of Connecticut, Department of Economics.
    2. Yannis M. Ioannides & Giorgio Topa, 2010. "Neighborhood Effects: Accomplishments And Looking Beyond Them," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 343-362, February.
    3. Angus Holford, 2015. "Take-up of Free School Meals: Price Effects and Peer Effects," Economica, London School of Economics and Political Science, vol. 82(328), pages 976-993, October.
    4. Weiran Huang & Ashlyn Nelson & Stephen L. Ross, 2018. "Foreclosure Spillovers within Broad Neighborhoods," Working Papers 2018-096, Human Capital and Economic Opportunity Working Group.
    5. Qingyan Shang, 2014. "Endogenous neighborhood effects on welfare participation," Empirical Economics, Springer, vol. 47(2), pages 639-667, September.
    6. Ethan Cohen-Cole & Burcu Duygan-Bump, 2008. "Household bankruptcy decision: the role of social stigma vs. information sharing," Supervisory Research and Analysis Working Papers QAU08-6, Federal Reserve Bank of Boston.

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    More about this item

    Keywords

    social interactions; neighborhood effects; welfare stigma;
    All these keywords.

    JEL classification:

    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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