The Effect of Sanctions on Stigma Consciousness

In Germany, the Hartz Reforms have triggered a trend towards ever stronger working morale. Everyone who is able to is supposed to work instead of live off welfare trends. Maximum periods for unemployment benefit receipt from unemployment assurance have been shortened and persons who do not prove enough effort to get (back) in employment get sanctioned. But what effects do measures that aim at enforcing the fulfilment of this working morale have on individuals? We evaluate the effect of sanctions on stigma consciousness. This is especially important as one pathway of unemployment influencing individual health is the perception of stigmatization that leads to a decrease in mental and even physical health.

The aspect we focus on is the role of sanctioning of unemployed persons in determining their feeling of stigma. The idea behind the assumption that sanctions might intensify feelings of stigmatization has not been addressed by theoretical work so far. However it seems plausible that the effects of income loss and feeling of control over one’s own situation already caused by job loss can be aggravated by sanctions.

The data used is a combination of the German “Panel Study Labour Market and Social Security” (PASS) and administrative data on sanctions. In the seventh wave of PASS (2013) a module on stigma consciousness and prejudices against unemployed persons was introduced. This will be central to analysing effects of sanctions on stigma consciousness. We use administrative data in order to gain more accurate information on sanctions as they tend to be underreported in survey data.

The information of stigma consciousness from wave seven can be combined with detailed information of socioeconomic information, information on personality traits etc. as explanatory variables for up to six years prior to the measurement of stigma consciousness. The sanction as well as employment history can be followed even further.

Stigma consciousness has not been analysed in terms of stigma caused by unemployment so far. The invention of the stigma consciousness scale in the seventh PASS wave thus opens an entirely blank research field.

The research question is whether unemployed persons who faced sanctions in the previous year feel more stigmatized than those who did not. There is a strong probability that confounding variables influence the propensity of being sanctioned as well as the propensity of feeling stigmatized. One way of dealing with this is the use of regression discontinuity analyses. This is possible because in Germany the law stipulates stricter terms for sanctioning persons younger than 25. With being sanctioned at least partly out of the control of the unemployed persons regression discontinuity allows the determination of the causal effect for persons at an age close to 25.