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Paper Abstract
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Social signaling influences economic behavior. For instance, individuals may exhaust resources to competitively signal higher levels of social status. Conversely, individuals may avoid signaling their status to minimize the stigma associated with low status. We conduct a laboratory experiment to explore how the stigma from benefit eligibility drives subsequent decisions to enter a tournament competition. Similar to previous work, we induce a stigma associated with a benefit for the low-status group. We then introduce a treatment to reduce stigma by expanding the benefit eligibility to a middle-status group in a ``plausible deniability'' treatment. While we do not observe evidence of a stigma affecting benefit take-up for the low-status group, we do observe a difference in preferences for competitiveness in a subsequent and unrelated task. When newly-eligible individuals qualify for the benefit, their rate of entry into a subsequent and unrelated tournament is reduced by 17-20 percentage points compared to the treatment in which they do not qualify. A potential interpretation of our results would suggest expansion of eligibility of certain government assistance programs may produce unintended consequences for the newly eligible.
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Paper Citation
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Valdez Gonzalez, Natalia and Brown, Alexander L. and Palma, Marco A., Social-Benefits Stigma and Subsequent Competitiveness. Available at SSRN: https://ssrn.com/abstract=4479804 or http://dx.doi.org/10.2139/ssrn.4479804
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Paper URL
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https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4479804
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