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Welfare Stigma Allowing for Psychological and Cultural Effects. An Agent-Based Simulation Study

  • Dalit Contini
  • Matteo Richiardi

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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Paper provided by LABORatorio R. Revelli, Centre for Employment Studies in its series LABORatorio R. Revelli Working Papers Series with number 56.

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Length: 23 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:cca:wplabo:56
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  1. Rebecca M. Blank, 2002. "Evaluating Welfare Reform in the United States," NBER Working Papers 8983, National Bureau of Economic Research, Inc.
  2. Robert Moffitt, 2002. "The Temporary Assistance for Needy Families Program," NBER Working Papers 8749, National Bureau of Economic Research, Inc.
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