Social Image Concerns and Welfare Take-Up
42 Pages Posted: 28 Aug 2018
Date Written: July 27, 2018
Using a laboratory experiment, we present first evidence that social image concerns causally reduce the take-up of an individually beneficial transfer. Our design manipulates 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 (ability stigma) and of being willing to live o_ others (free-rider stigma). Using a placebo treatment, we exclude other explanations for the observed stigma effects. Although stigma reduces take-up, elicitation of political preferences reveals that only a minority of "taxpayers" vote for the public transfer.
Keywords: Stigma, signaling, redistribution, non take-up, welfare program
JEL Classification: C91, D03, H31, I38
Suggested Citation: Suggested Citation