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Social Image Concerns and Welfare Take-Up

Discussion Papers 1752, 40 S.

Jana Friedrichsen, Tobias König, Renke Schmacker


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Published in: Journal of Public Economics 168 (2018), S. 174-192


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.

Renke Schmacker

Research Associate in the Public Economics Department

JEL-Classification: C91;D03;H31;I38
Keywords: Stigma, signaling, redistribution, non take-up, welfare program
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