Welfare to work and work to welfare: the effect of the reference point - a theoretical and experimental study

Arie Sherman; Tal Shavit

doi:10.1016/j.econlet.2009.08.020

Welfare to work and work to welfare: the effect of the reference point - a theoretical and experimental study

Arie Sherman, Tal Shavit

Research output: Contribution to journal › Article › peer-review

10 Scopus citations

Abstract

This paper shows theoretically (based on loss aversion) and experimentally that the replacement rate between allowance and salary is above one when moving from work to welfare. When moving from welfare to work the replacement rate is lower than one.

Original language	English
Pages (from-to)	290-292
Number of pages	3
Journal	Economics Letters
Volume	105
Issue number	3
DOIs	https://doi.org/10.1016/j.econlet.2009.08.020
State	Published - Dec 2009
Externally published	Yes

Keywords

Experiment
Loss aversion
Reference point
Replacement rate
Welfare
Work

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10.1016/j.econlet.2009.08.020

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title = "Welfare to work and work to welfare: the effect of the reference point - a theoretical and experimental study",

abstract = "This paper shows theoretically (based on loss aversion) and experimentally that the replacement rate between allowance and salary is above one when moving from work to welfare. When moving from welfare to work the replacement rate is lower than one.",

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author = "Arie Sherman and Tal Shavit",

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KW - Reference point

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Welfare to work and work to welfare: the effect of the reference point - a theoretical and experimental study

Abstract

Keywords

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