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Crowding-Out or Crowding-In? Heterogeneous Effects of Insurance on Solidarity

Author

Listed:
  • Landmann, Andreas

    (University of Erlangen-Nuremberg)

  • Vollan, Björn

    (University of Marburg)

  • Henning, Karla

    (KfW Development Bank)

  • Frölich, Markus

    (University of Mannheim)

Abstract

We analyze whether the availability of formal insurance products affects informal solidarity transfers in two independent behavioral experiments in the Philippines. The first experiment allows for communication, non-anonymity and unrestricted transfers. The second experiment mimics a laboratory setting without communication and preserves anonymity, which minimizes strategic concerns. The introduction of an insurance treatment alters solidarity in both experiments. We find crowding-out effects in the first setting with strategic motives, while there are even crowding-in effects due to insurance availability in the anonymous experiment. These and additional supporting results are in line with crowding-out of strategic, but not necessarily intrinsic motives due to the availability of insurance.

Suggested Citation

  • Landmann, Andreas & Vollan, Björn & Henning, Karla & Frölich, Markus, 2020. "Crowding-Out or Crowding-In? Heterogeneous Effects of Insurance on Solidarity," IZA Discussion Papers 13688, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13688
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    Cited by:

    1. Hample, Kelsey C, 2021. "Formal insurance for the informally insured: Experimental evidence from Kenya," World Development Perspectives, Elsevier, vol. 22(C).
    2. Landmann, Andreas & Vollan, Björn, 2024. "Pro-sociality of local democratic leaders: The impact and dynamics of being elected," European Economic Review, Elsevier, vol. 164(C).

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    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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