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The poverty-assistance paradox

Author

Listed:
  • Janky, Béla
  • Varga, Dániel

Abstract

We present a model of preferences on welfare transfers, which incorporates the recipient’s wealth as a signal of needs and deservingness. We show that a paradox may arise: the poorer the recipient is, the less transfer he/she will get. Implications might include the negative impact of targeting assistance to the poorest on public support for welfare.

Suggested Citation

  • Janky, Béla & Varga, Dániel, 2013. "The poverty-assistance paradox," Economics Letters, Elsevier, vol. 120(3), pages 447-449.
  • Handle: RePEc:eee:ecolet:v:120:y:2013:i:3:p:447-449
    DOI: 10.1016/j.econlet.2013.06.003
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    References listed on IDEAS

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    1. Roland Bénabou & Jean Tirole, 2006. "Belief in a Just World and Redistributive Politics," The Quarterly Journal of Economics, Oxford University Press, vol. 121(2), pages 699-746.
    2. Rafael Di Tella & Juan Dubra, 2013. "Fairness and Redistribution: Comment," American Economic Review, American Economic Association, vol. 103(1), pages 549-553, February.
    3. Rafael Di Tella & Juan Dubra, 2010. "A note on Fairness and Redistribution," Harvard Business School Working Papers 11-059, Harvard Business School.
    4. Fong, Christina M. & Luttmer, Erzo F.P., 2011. "Do fairness and race matter in generosity? Evidence from a nationally representative charity experiment," Journal of Public Economics, Elsevier, vol. 95(5-6), pages 372-394, June.
    5. Arnab Chatterjee & Sitabhra Sinha & Bikas K. Chakrabarti, 2007. "Economic Inequality: Is it Natural?," Papers physics/0703201, arXiv.org, revised Mar 2007.
    6. Alberto Alesina & George-Marios Angeletos, 2005. "Fairness and Redistribution," American Economic Review, American Economic Association, vol. 95(4), pages 960-980, September.
    7. Besley, Timothy & Coate, Stephen, 1992. "Understanding welfare stigma: Taxpayer resentment and statistical discrimination," Journal of Public Economics, Elsevier, vol. 48(2), pages 165-183, July.
    8. Konow, James, 2010. "Mixed feelings: Theories of and evidence on giving," Journal of Public Economics, Elsevier, vol. 94(3-4), pages 279-297, April.
    9. Rafael Di Tella & Juan Dubra, 2013. "Fairness and Redistribution, a comment," Documentos de Trabajo/Working Papers 1302, Facultad de Ciencias Empresariales y Economia. Universidad de Montevideo..
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    More about this item

    Keywords

    Welfare preferences; Social preferences; Welfare transfers;

    JEL classification:

    • H8 - Public Economics - - Miscellaneous Issues
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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