Does the Unemployment Benefit Institution affect the Productivity of Workers? Evidence from a Field Experiment

Mariana Blanco, Patricio Dalton () and Juan Vargas

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: We investigate whether and how the type of unemployment benefit institution affects productivity. We designed a field experiment to compare workers' productivity under a welfare system, where the unemployed receive an unconditional monetary transfer, with their productivity under a workfare system, where the transfer is received conditional on the unemployed spending some time on ancillary activities. First, we find that having an unemployment benefit institution, regardless of whether it makes transfers conditional or unconditional, increases workers' productivity. Second, we find that productivity is higher under Welfare than under Workfare. Becoming unemployed under Welfare comes at the psychological cost of a drop in self-esteem, presumably due to the shame or stigma associated with receiving an unconditional unemployment benefit. We document the empirical relevance of precisely this channel. The differences we observe in productivity suggest that this psychological cost acts as an extra non-monetary incentive for workers under Welfare to put a higher effort in their work.

Keywords: Unemployment Benefits; Workfare; Productivity; Self-esteem; Shame. (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-eff, nep-exp and nep-hrm
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http://www2.warwick.ac.uk/fac/soc/economics/resear ... /178-2013_dalton.pdf

Related works:
Working Paper: Does the unemployment benefit institution affect the productivity of workers? Evidence from a field experiment (2013)
Working Paper: Does the Unemployement Benefit Institution Affect the Productivity of Workers? Evidence from a Field Experiment (2013)
Working Paper: Does the Unemployement Benefit Institution Affect the Productivity of Workers? Evidence from a Field Experiment (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:cge:wacage:178

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