Replicator Evolution of Welfare Stigma: Welfare Fraud vs. Incomplete Take-Up

Jun-ichi Itaya () and Kenichi Kurita ()

No 8621, CESifo Working Paper Series from CESifo

Abstract: There are two important problems in welfare benefit programs: the prevalence of welfare fraud, in which ineligible people receive welfare benefits, and incomplete take-up, whereby eligible poor people are reluctant to claim welfare benefits. This study investigates both of these opposing phenomena using simple replicator models of statistical discrimination and the tax-payer resentment view welfare stigma suggested by Besley and Coate (1992). We find multiple stable equilibria in the long run, one of which entails low welfare fraud and 100% incomplete take-up and the other of which entails high welfare fraud and complete take-up in either model, and, moreover, that an interior stationary equilibrium that allows for the coexistence of welfare fraud and incomplete take-up is unstable in the model of statistical discrimination view welfare stigma, but it is stable in the model of the tax-payer resentment view welfare stigma. This difference arises from the different nature of stigma cost functions in these two models.

Keywords: stigma; replicator dynamics; incomplete take-up; welfare fraud; non-take-up (search for similar items in EconPapers)
JEL-codes: H31 H53 I38 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp8621.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_8621

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().