Welfare to work and work to welfare: the effect of the reference point -- a theoretical and experimental study

Arie Sherman and Tal Shavit ()

Economics Letters, 2009, vol. 105, issue 3, 290-292

Abstract: This paper shows theoretically (based on loss aversion) and experimentally that the replacement rate between allowance and salary is above one when moving from work to welfare. When moving from welfare to work the replacement rate is lower than one.

Keywords: Welfare; Work; Reference; point; Experiment; Loss; aversion; Replacement; rate (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:105:y:2009:i:3:p:290-292

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