Engineering an incentive to search for work: A comparison groups approach

Oded Stark, Marcin Jakubek, Martyna Kobus

Research output: Contribution to journalArticlepeer-review

Abstract

Social comparisons are important in the employment sphere. A "culture of unemployment" may evolve and prevail because it is optimal for an individual to remain unemployed when other unemployed individuals constitute his main reference group. We advance the idea that by making the receipt of unemployment benefits conditional on engagement in an incentive-enhancing activity (for example, work under state-sponsored employment schemes or participation in work-site-based training programs), a government can engineer a revision of the reference groups of an unemployed individual in order to induce him to seek work.

Original languageEnglish
Pages (from-to)1-4
Number of pages4
JournalEconomics Letters
Volume132
DOIs
StatePublished - 1 Jul 2015
Externally publishedYes

Keywords

  • D04
  • D69
  • H53
  • J22
  • J64
  • J65
  • Relative deprivation
  • Social comparisons
  • Unemployment benefits

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