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Stigma model of welfare fraud and non‐take‐up: Theory and evidence from OECD panel data

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  • Kenichi Kurita
  • Nobuaki Hori
  • Yuya Katafuchi

Abstract

This paper attempts to challenge two puzzles in the welfare program. The first puzzle is “non‐take‐up welfare,” which occurs when needy people do not take up welfare. Second, in some countries, the benefit level is high, but the recipient ratio is low; while the other nations have lower benefit levels but higher recipient ratios. We present a model of welfare stigma in which both non‐take‐up and welfare fraud exist within the equilibrium. This shows the possibility for the recipient ratio to decrease as the benefit level increases in the comparative statics. Our empirical results are consistent with our theoretical results.

Suggested Citation

  • Kenichi Kurita & Nobuaki Hori & Yuya Katafuchi, 2022. "Stigma model of welfare fraud and non‐take‐up: Theory and evidence from OECD panel data," International Journal of Economic Theory, The International Society for Economic Theory, vol. 18(3), pages 310-338, September.
    • Handle: RePEc:bla:ijethy:v:18:y:2022:i:3:p:310-338
    DOI: 10.1111/ijet.12295
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    Cited by:

    1. Hamamura, Jumpei & Kurita, Kenichi, 2021. "Does stigma against tax avoidance improve social welfare?," MPRA Paper 107173, University Library of Munich, Germany.
    2. Kenichi Kurita & Shunsuke Managi, 2022. "COVID-19 and Stigma: Evolution of Self-restraint Behavior," Dynamic Games and Applications, Springer, vol. 12(1), pages 168-182, March.
    3. Kino, Shiho & Nishioka, Daisuke & Ueno, Keiko & Saito, Masashige & Kondo, Naoki, 2022. "Changes in social relationships by the initiation and termination of public assistance in the older Japanese population: A JAGES panel study," Social Science & Medicine, Elsevier, vol. 293(C).
    4. Yuya Katafuchi & Kenichi Kurita & Shunsuke Managi, 2021. "COVID-19 with Stigma: Theory and Evidence from Mobility Data," Economics of Disasters and Climate Change, Springer, vol. 5(1), pages 71-95, April.
    5. Kurita, Kenichi, 2021. "Comparative institutional analysis of poverty-alleviation systems: Does basic income improve social welfare?," MPRA Paper 107177, University Library of Munich, Germany.
    6. Katafuchi, Yuya & Kurita, Kenichi & Managi, Shunsuke, 2020. "Self-restraint behavior under COVID-19 through stigma: Theory and evidence based on mobility data," MPRA Paper 102182, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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