Unemployment and prosociality

Evidence from an Experiment on Charity to Welfare Recipients: Reciprocity, Altruism and the Empathic Responsiveness Hypothesis

(Fong 2007)

  • The experiment was an n-donor dictator game in which multiple donors were matched with one real-life welfare recipient.
  • There were three recipients (thus 3 distinct treatments). All three recipients were single African-American women with dependent children who did not have full-time jobs, received government assistance, had annual household incomes of less than $25,000, and were less than 55 years old.
  • Three recipients had to fill in a short questionnaire and they differed only in their answers to three final questions, so from the Dictators' point of view they were categorized as:
    • industrious
    • lazy
    • no information (questions were omitted)

Each donor was given a five dollar show-up fee and ten dollars to use in the experiment. Each donor read some information about the recipient, then privately and anonymously gave any amount of the ten dollar pie of his or her choosing – from zero to ten dollars – to the welfare recipient and kept the rest. Each recipient earned the sum of the donations from the donors she was matched with.

Results

  • randomly provided direct information about the recipient's attachment to the labour force – have large and very robust positive effects on offers.

  • average donations to lazy, no-info, and industrios were: 1.8, 3.2, and 2.78 correspondigly.

  • Those donators who were categorized as Humanitarians along Katz-Hass Humanitarianism-Egalitarianism scale, donated 5.00 out of a 10.00 pie to industrious recipients, and only 1$ to 'lazy' ones.

Empirical Studies of Unemployment: Search Behavior, Reintegration and Prevention \cite{krauseempirical2013}.

She measured the chance of finding jobs in a population of unemployed. Several questions regarding their attitudes were asked:

  • Risk attitudes: How do you estimate yourself personally: are you generally prepared to take risks or do you try to avoid risks?
  • Time preferences: How do you regard yourself as an individual: are you someone who generally gets impatient or someone who always has a lot of patience?
  • Trust: How do you regard yourself as an individual: are you someone who generally trusts others or are you someone who does not trust others?
  • Reciprocity: To what extent does the following statement apply to you? I am prepared to accept costs to help someone who has helped me previously.

Results:

No results with an exception of risk attitude. More risk averse individuals are less selective, i.e. that they have lower reservation wages – which then lead to higher employment probabilities. Time preferences, trust and reciprocity do not affect the probability of being employed

OLS Coefs:

Risk -.009 (0.003)

Time 0.004 (0.003)

Trust 0.003 (0.004)

Reciprocity 0.003 (0.005)

Impact of Re-employment on Psychological Distress among Long-term Unemployed (Halvorsen 1998)

Survey: It has been demonstrated that differences in psychological distress between the recurrently unemployed and those insecurely reemployed are not significant.

Pro-Social Behaviour of Unemployed Individuals - An Experimental Study (Homann)

Solidarity game (Selten 1998) played with unemployed recruited in German unemployment centers (N=230).

They matched them in pairs, telling them that it is unknown whether a second person is employed or unemployed (to avoid in-group effect). Then they played a lottery with them - by rolling a dice, they had a chance to win either 10 euro or 0. The same happened with another partner. Before playing the lottery they could choose whether they would like to share some of their earnings if (and only if) they win and another person loses. The degree of prosociality (as always) was measured by the amount they'd like to donate to another participant.

Results:

  1. They divided unemployed into three categories: a) those who just took their welfare benefits, and had no other voluntary jobs. b) those who were forced to work by the state. c) those who chose to participate in some voluntary activities.
  2. Voluntary workers show significantly more solidarity than non- or forced workers.
  3. Voluntary workers expect significantly higher solidarity from their counterpart. (they elicited their beliefs about the decisions of others)
  4. 45% of non- or forced workers gave nothing (0), and only 25% of those who work voluntary gave nothing.