Social Image Concerns and Welfare Take-Up

42 Pages Posted: 28 Aug 2018

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: July 27, 2018

Abstract

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

Friedrichsen, Jana and König, Tobias and Schmacker, Renke, Social Image Concerns and Welfare Take-Up (July 27, 2018). DIW Berlin Discussion Paper No. 1752, Available at SSRN: https://ssrn.com/abstract=3239323 or http://dx.doi.org/10.2139/ssrn.3239323

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

University of Hannover ( email )

Koenigsworther Platz 1
30167 Hannover, DE 30167
Germany

Renke Schmacker (Contact Author)

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

Mohrenstraße 58
Berlin, 10117
Germany

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