Optimal disability assistance when fraud and stigma matter

Laurence Jacquet

No 2006052, Discussion Papers (ECON - Département des Sciences Economiques) from Université catholique de Louvain, Département des Sciences Economiques

Abstract: I study the optimal redistributive structure when individuals with distinct productivities also differ in disutility of work due to either disability or distase for work. Taxpayers have resentment against inactive benefit recipients because some of them are not actually disabled but lazy. Therefore, disabled people who take up transfers are stigmatized. Their stigma disutility increases with the number of non-disabled recipients. Tagging transfers according to disability characteristics decreases stigme. However, tagging is costly and imperfect. In this context, I show how the level of the per capital cost of monitoring relative to labor earnings of low-wage workers determines the optimality of tagging. Under mild conditions, despite their stigma disutility, inactive and disabled people get a strictly lower consumption than low-wage workers. The results are valid under a utilitarian criterion and a criterion which does not compensage for distate for work.

Keywords: Tagging; Disability; Benefit; Fraud; Stigma (search for similar items in EconPapers)
JEL-codes: H21 H53 (search for similar items in EconPapers)
Pages: 32
Date: 2006-11-01
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 (6)

Downloads: (external link)
http://sites.uclouvain.be/econ/DP/IRES/2006-52.pdf (application/pdf)

Related works:
Working Paper: Optimal Disability Assistance When Fraud And Stigma Matter (2006)
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:ctl:louvec:2006052

Access Statistics for this paper

More papers in Discussion Papers (ECON - Département des Sciences Economiques) from Université catholique de Louvain, Département des Sciences Economiques Place Montesquieu 3, 1348 Louvain-la-Neuve (Belgium). Contact information at EDIRC.
Bibliographic data for series maintained by Virginie LEBLANC ().