A lab experiment in Côte d’Ivoire finds that making applications for cash support public reduced unsuccessful claims but also deterred more than one in four eligible participants.

We examine how social stigma affects the willingness of low-income individuals to apply for financial support. After completing tasks to earn income in the lab, participants are given the opportunity to apply for a transfer from a social fund earmarked for the lowest earners. We experimentally vary whether the application is public or private and whether the funds come from the experimenters or other participants. We find that making the application public reduces take-up by 31 percentage points. Adding peer funding leads to a further 10 percentage point drop. These effects are strongest when income is earned through effort instead of a lottery, and when both public visibility and peer funding are present. The findings are not driven by altruistic or redistributive preferences, but perspective taking makes participants more sensitive to the public application treatment. Our findings suggest that ensuring privacy in the application process helps increase access to income support programs.

We investigate the potential welfare cost of relative rank considerations using a series of vignettes and lab-in-the-field experiments with over 2,000 individuals in Abidjan, Cote d'Ivoire. We show that: (1) individuals judged to be of a lower rank are perceived as more likely to be sidelined from beneficial opportunities in many aspects of life; and (2) in response, individuals distort their appearance and consumption choices in order to appear of higher rank. These effects are strong and economically significant. As predicted by a simple signaling model, the distortion is larger for individuals with low (but not too low) socio-economic status.