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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.

Suggested Citation

  • Dalit Contini & Matteo Richiardi, 2007. "Welfare Stigma Allowing for Psychological and Cultural Effects. An Agent-Based Simulation Study," LABORatorio R. Revelli Working Papers Series 56, LABORatorio R. Revelli, Centre for Employment Studies.
  • Handle: RePEc:cca:wplabo:56
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    File URL: http://www.laboratoriorevelli.it/_pdf/wp56.pdf
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    References listed on IDEAS

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    1. Robert A. Moffitt, 2003. "The Temporary Assistance for Needy Families Program," NBER Chapters,in: Means-Tested Transfer Programs in the United States, pages 291-364 National Bureau of Economic Research, Inc.
    2. 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.
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    Keywords

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

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