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Welfare Stigma in the Lab: Evidence of Social Signaling

Jana Friedrichsen (), Tobias König and Renke Schmacker ()

No 6519, CESifo Working Paper Series from CESifo

Abstract: Using a laboratory experiment, we present first evidence that stigmatization through public exposure causally reduces the take-up of an individually beneficial transfer. Our design exogenously varies 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 and of being willing to live off others. Using a placebo treatment we can exclude other explanations for the observed stigma effect. In the experiment, social stigmatization implies a reduction in the take-up rate of 30 percentage points.

Keywords: stigma; signaling; redistribution; non take-up; welfare program (search for similar items in EconPapers)
JEL-codes: D03 H31 I38 C91 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-exp and nep-ure
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Working Paper: Welfare stigma in the lab: Evidence of social signaling (2016)
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