CeDEx workshop - Luis Miller (University of the Basque Country)

Abstract: We test the conjecture that becoming unemployed erodes the extent to which a person acknowledges earned entitlement. We use behavioral experiments to generate incentive compatible measures of individuals’ tendencies to acknowledge earned entitlement and incorporate these experiments into a two-stage study. In the first stage, participants’ acknowledgement of earned entitlement was measured by engaging them in the behavioral experiments and their individual employment status and other relevant socio-economic characteristics were recorded. In the second stage, a year later, the process was repeated using the same instruments. The combination of the experimentally generated data and the longitudinal design of the study allows us to test our conjecture directly, while excluding the pure self-interest confound. We report a large and significant negative effect of losing a job on the acknowledgement of earned entitlement and a positive, but smaller and insignificant, effect of getting a job.