Reconsidering the effect of welfare stigma on unemployment (original) (raw)
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Welfare stigma with decreasing employability
We analyze the effects of income support on unemployment and welfare dynamics when stigma is attached to welfare provision. Stigma has been modeled in the literature as a cost of welfare participation; in this paper we analyze the effect of income support on unemployment and welfare dynamics by assuming that welfare stigma also leads to progressive loss of employability. Unemployment and welfare participation are studied under the cross-sectional and dynamic perspectives. While traditional models predict lower unemployment rates with welfare stigma, in our model unemployment rates follow a non-monotonic pattern: as a consequence, in addition to reducing take-up rates, welfare stigma may also contribute to increase unemployment.
The Stigma of Unemployment: When joblessness leads to being jobless
2011
In two studies, we find that unemployment stigma exists, occurs instantaneously, is difficult to alleviate, and leads to hiring biases against the unemployed. This stigma-based account of the unemployed stands in contrast to economic theories purporting that individuals rationally base their judgments on the skill deterioration the unemployed should experience. Study 1 provides evidence that unemployment stigma exists and can lead to a hiring bias against the unemployed. Furthermore, unemployment rationales indicating whether unemployment was controllable (i.e. Voluntarily Left) or uncontrollable (i.e., Laid-off), a causal dimension that has been found to mitigate negative responses toward stigma in past research did not alleviate unemployment stigma. This may have been the case because of perceivers' fundamental tendency to overemphasize internal/dispositional explanations for target outcomes. Study 2 supports this reasoning as we found that providing a rationale indicating causal externality (i.e., Employer Bankruptcy), to correct for this attribution bias, alleviated unemployment stigma.
Journal of Public Economic Theory, 2014
We dissect welfare stigma into two types: traditional and statistical, and show that the latter can be employed as a desirable form of a welfare ordeal, as its costs are positively correlated with ability.
The Role of Stigma in the Design of Welfare Programs
We consider the notion of welfare stigma à la Besley and Coate (1992b). This stigma is attributed to welfare claimants by society when they are perceived as undeserving in the sense that they falsely claim to be eligible for welfare benefits. However, due to imperfect information, this stigma may be extended, with some probability, to all welfare claimants. We examine the implications of this kind of stigma for the design of welfare programs.
Model of endogenous welfare stigma: Statistical discrimination view
2019
This paper tries to challenge two puzzles in the welfare benefit program. The first puzzle is non-take-up welfare which means poor people do not take-up welfare even though they are approved to take-up. Second, empirical evidence suggests that there may exist the inverse U-shaped relationship between benefit level and beneficiary ratio. We present a model of welfare stigma as a hypothesis to explain the above puzzles. Specifically, we investigate the statistical discrimination view model. Results are summarized as the relationship between two types of elasticity.
2012
This paper empirically decomposes the costs of welfare participation using a model of labor supply and participation in two food assistance programs: food stamp program and WIC. The context allows for the most reliable estimates to date of the relative importance of psychological costs, or stigma, as compared to the effort required to become eligible and maintain eligibility (time costs). The relative size of these two costs has implications for policy. We find that psychological costs are four times larger on average than the time costs associated with participation in food assistance programs. In addition, we find evidence that psychological costs are not necessarily an effective screening mechanism.
Welfare stigma allowing for psychological and cultural effects. An Agent-Based simulation study
We investigate the effects of income support on unemployment and welfare dynamics when stigma is attached to welfare provision. Stigma has been modelled in the literature as a cost of entry into welfare. Allowing for psychological factors, we assume that with stigma welfare provision leads to lower search effectiveness; moreover, we allow for interaction among agents. Carrying out an agent-based simulation study, we find that welfare take-up rates decrease with stigma while welfare spells get longer. Unemployment rates are not monotonically related to the amount of stigma, implying that we can find higher levels of unemployment with stigma than with no stigma.
Welfare fraud and welfare stigma
Journal of Economic Psychology, 1997
The paper argues that welfare fraud and welfare stigma, apparently two phenomena of opposite nature, may be modeled with the aid of a single apparatus, thus allowing a comparative investigation of participants' take-up of welfare benefits. Focusing on social stigma generated through public exposure in welfare programs, it is shown that under fairly reasonable conditions on the parameters of the model, stigma will constitute a stronger deterrent to participation than the expected punishment for dishonest claiming (in both discouraging participation and reducing its duration). This result is in line with sociologists' contention that the threat of informal sanctions may have a much greater effect on behavior than the threat of legal sanctions. It suggests that the truly needy could be more effectively assisted if less effort were directed towards the enforcement of reporting regulations and work requirements in welfare programs, and more resources shifted to enforcing eligibility conditions and combating dishonest claiming.
0 WELFARE FRAUD AND WELFARE STIGMA by *
The paper argues that welfare fraud and welfare stigma, apparently two phenomena of opposite nature, may be modeled with the aid of a single apparatus, thus allowing a comparative investigation of participants’ take-up of welfare benefits. Focusing on public exposure stigma generated through excessive reporting or work requirements in welfare programs, it is shown that under fairly reasonable conditions stigma will constitute a stronger deterrent to participation than the expected punishment on dishonest claiming (in both discouraging participation and reducing its duration). This result (which is in line with sociologists’ contention that the threat of informal sanctions has much greater effect on behavior than the threat of legal sanctions) suggests that the truly needy could be more effectively assisted if less effort were directed towards the enforcement of reporting and work requirements, and more resources shifted to enforcing eligibility conditions and combating dishonest cla...
The Stigma of Unemployment: Are Unemployed People Seen As Less
The objective of the paper is to explore the nature of sigma of unemployment and its effect on hiring in organisation from the perspective of employers in order to contribute to the body of knowledge that exist in the area of the causes of unemployment. The paper is based on quantitative, exploratory, cross-sectional and a survey study. The target population is the employers in Sunyani Township. The sample size is 115 selected through convenience sampling method. Data was collected using self-design questionnaire administered at the work places of the respondents. The questions were explained to the respondents before they answered the questions. The data collected was analysed using descriptive statistics. The results indicate that respondents in the survey do not hold significant stigma against the unemployed and are not biased against the unemployed in hiring. It is recommended that employers should not discriminate against unemployed since such practices harm employer"s competitiveness by eliminating qualified unemployed persons from vacant job avenues. Future studies should examine the same issues from the perspective of the unemployed in a causal study using structural modeling in many communities.