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Social Image Concerns and Welfare Take-Up

Author

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  • Friedrichsen, Jana

    (DIW Berlin and HU Berlin)

  • König, Tobias

    (WZB Berlin and HU Berlin)

  • Schmacker, Renke

    (DIW Berlin)

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 off 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

  • Friedrichsen, Jana & König, Tobias & Schmacker, Renke, 2018. "Social Image Concerns and Welfare Take-Up," Rationality and Competition Discussion Paper Series 112, CRC TRR 190 Rationality and Competition.
  • Handle: RePEc:rco:dpaper:112
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    Cited by:

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    2. Ha Trong Nguyen & Huong Thu Le & Luke B Connelly, 2021. "Who's declining the “free lunch”? New evidence from the uptake of public child dental benefits," Health Economics, John Wiley & Sons, Ltd., vol. 30(2), pages 270-288, February.
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    5. Germain, Antoine, 2023. "Basic income versus fairness: redistribution with inactive agents," LIDAM Discussion Papers CORE 2023022, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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    8. Feld, Lars P. & Schmidt, Christoph M. & Schnabel, Isabel & Truger, Achim & Wieland, Volker, 2019. "Den Strukturwandel meistern. Jahresgutachten 2019/20," Annual Economic Reports / Jahresgutachten, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, volume 127, number 201920.
    9. Wolf, Tobias, 2020. "Welfare while working: How does the life satisfaction approach help to explain job search behavior?," Discussion Papers 2020/14, Free University Berlin, School of Business & Economics.
    10. Reanos, Miguel Tovar & Curtis, John & Pillai, Arya & Meier, David, 2023. "Fuel poverty and financial literacy: Evidence from Irish home owners," Papers WP751, Economic and Social Research Institute (ESRI).

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    More about this item

    Keywords

    stigma; signaling; redistribution; non take-up; welfare program;
    All these keywords.

    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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