Social Image Concerns and Welfare Take-Up

Friedrichsen, Jana; König, Tobias and Schmacker, Renke (2018): Social Image Concerns and Welfare Take-Up. Collaborative Research Center Transregio 190, Discussion Paper No. 112

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 off 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.

• Item Type: Paper
• Keywords: stigma; signaling; redistribution; non take-up; welfare program
• Faculties: Economics > Collaborative Research Center Transregio "Rationality and Competition"
• Subjects: 300 Social sciences > 330 Economics
• JEL Classification: C91, D03, H31, I38
• Language: English