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 | |
| State | Published - Dec 2009 |
| Externally published | Yes |
Keywords
- Experiment
- Loss aversion
- Reference point
- Replacement rate
- Welfare
- Work
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