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Social Image Concerns and Welfare Take-Up

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  • Jana Friedrichsen
  • Tobias König
  • Renke Schmacker

Abstract

Using a laboratory experiment, we present first evidence that social image concerns causally reduce the take-up of an individually beneficial transfer. Our design manipulates the informativeness of the take-up decision by varying whether transfer eligibility is based on ability or luck, and how the transfer is financed. We find that subjects avoid the inference both of being low-skilled (ability stigma) and of being willing to live o_ others (free-rider stigma). Using a placebo treatment, we exclude other explanations for the observed stigma effects. Although stigma reduces take-up, elicitation of political preferences reveals that only a minority of \taxpayers" vote for the public transfer.

Suggested Citation

  • Jana Friedrichsen & Tobias König & Renke Schmacker, 2018. "Social Image Concerns and Welfare Take-Up," Discussion Papers of DIW Berlin 1752, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp1752
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    References listed on IDEAS

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    More about this item

    Keywords

    Stigma; signaling; redistribution; non take-up; welfare program;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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