Welfare Stigma in the Lab: Evidence of Social Signaling

39 Pages Posted: 12 Jul 2017

See all articles by Jana Friedrichsen

Jana Friedrichsen

Humboldt University of Berlin - Faculty of Economics; WZB Berlin Social Science Center; German Institute for Economic Research (DIW Berlin)

Tobias König

University of Hannover

Renke Schmacker

German Institute for Economic Research (DIW Berlin)

Date Written: June 14, 2017

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

JEL Classification: D030, H310, I380, C910

Suggested Citation

Friedrichsen, Jana and König, Tobias and Schmacker, Renke, Welfare Stigma in the Lab: Evidence of Social Signaling (June 14, 2017). CESifo Working Paper Series No. 6519, Available at SSRN: https://ssrn.com/abstract=2999722 or http://dx.doi.org/10.2139/ssrn.2999722

Jana Friedrichsen

Humboldt University of Berlin - Faculty of Economics ( email )

Spandauer Strasse 1
Berlin
Germany

WZB Berlin Social Science Center ( email )

Reichpietschufer 50
D-10785 Berlin, 10785
Germany

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Tobias König (Contact Author)

University of Hannover ( email )

Koenigsworther Platz 1
30167 Hannover, DE 30167
Germany

Renke Schmacker

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

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