Stigma and take‐up of labour market assistance: Evidence from two field experiments

Abstract

AbstractAversion to ‘stigma’—disutility associated with a programme or activity due to beliefs about how it is perceived—may affect labour market choices and utilization of social programmes, but empirical evidence of its importance is scarce. Using two randomized field experiments, we show that stigma can affect consequential labour market decisions. Treatments designed to alleviate stigma concerns about taking entry‐level jobs—such as how those jobs are perceived by society—had small average effects on take‐up of job assistance programmes. However, using compositional analysis and machine learning methods, we document large heterogeneity in the responses to our treatments. Stigma significantly affects the composition of who takes up a programme: the treatments were more successful in overcoming stigma for older, wealthier and working respondents. For other people, we show that our treatments merely increased the salience of the stigma without dispelling it. We conclude that social image concerns affect labour market decisions and that messaging surrounding programmes can have important effects on programme take‐up and composition.