Welfare Stigma Allowing for Psychological and Cultural Effects. An Agent-Based Simulation Study
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.
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- 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.
- Robert Moffitt, 2001.
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Economics Working Paper Archive
463, The Johns Hopkins University,Department of Economics.
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- Robert Moffitt, 2002. "The Temporary Assistance for Needy Families Program," NBER Working Papers 8749, National Bureau of Economic Research, Inc.
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