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Does the unemployment benefit institution affect the productivity of workers? Evidence from a field experiment
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Blanco, Mariana, Dalton, Patricio S. and Vargas, Juan F. (2013) Does the unemployment benefit institution affect the productivity of workers? Evidence from a field experiment. Working Paper. Coventry, UK: Department of Economics, University of Warwick. CAGE Online Working Paper Series, Volume 2013 (Number 178).
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Official URL: http://www2.warwick.ac.uk/fac/soc/economics/resear...
Abstract
We investigate whether and how the type of unemployment benefit institution affects
productivity. We designed a field experiment to compare workers' productivity under a
welfare system, where the unemployed receive an unconditional monetary transfer, with
their productivity under a workfare system, where the transfer is received conditional
on the unemployed spending some time on ancillary activities. First, we find that
having an unemployment benefit institution, regardless of whether it makes transfers
conditional or unconditional, increases workers' productivity. Second, we find that
productivity is higher under Welfare than under Workfare. Becoming unemployed
under Welfare comes at the psychological cost of a drop in self-esteem, presumably
due to the shame or stigma associated with receiving an unconditional unemployment
benefit. We document the empirical relevance of precisely this channel. The differences
we observe in productivity suggest that this psychological cost acts as an extra nonmonetary
incentive for workers under Welfare to put a higher effort in their work.
| Item Type: | Working or Discussion Paper (Working Paper) |
|---|---|
| Subjects: | H Social Sciences > HB Economic Theory H Social Sciences > HM Sociology |
| Divisions: | Faculty of Social Sciences > Economics |
| Library of Congress Subject Headings (LCSH): | Unemployment insurance , Labor productivity -- Econometric models |
| Series Name: | CAGE Online Working Paper Series |
| Publisher: | Department of Economics, University of Warwick |
| Place of Publication: | Coventry, UK |
| Official Date: | November 2013 |
| Volume: | Volume 2013 |
| Number: | Number 178 |
| Number of Pages: | 39 |
| Status: | Not Peer Reviewed |
| Publication Status: | Published |
| Funder: | Universidad del Rosario |
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