I received this image as a forward in WhatsApp from a friend who felt that I should get some printed like this for myself.
I did not think that this would serve any purpose for me but, on seeing it as a forward from me, another friend who has the necessary infrastructure of an office with staff suggested that he order for a hundred cards with my name and with some modifications.
I agreed and when it gets printed, I shall write another blog post on it.
In the meanwhile, the “Unemployed” description on the card took me to one of my favourite exchange of letters in The Economist between a reader and The Undercover Economist.
The Letter.
AUGUST 6, 2005
Dear Economist,
My son-in-law has been unemployed for a couple of months now. As far as I can make out, he’s enjoying a PlayStation lifestyle while being supported by the state and by my daughter, who has had to find a temporary job. What concerns me is that he’ll get used to this. Should I tell my daughter to apply pressure by quitting her job?
Yours sincerely,
Godfrey Pickens, via email
The Response.
Dear Mr. Pickens,
The issue here is whether your son-in-law’s preferences will change over time—will he “get used” to a life of leisure, and so be less likely to work?
There are two competing views here. One is that he will become hooked on leisure (the welfare trap hypothesis) and will work less in the future, even if his wife quits her job. The other, equally plausible in theory, is that he will become addicted to the extra income provided by his wife’s new job, and if she quits, he will go on to work harder than before.
Such competing hypotheses have been hard to test in the past. But economist John Kagel has succeeded in running a series of experiments that shed light on the matter.
Kagel first forces his subjects to work for their income. Then, for a while, he provides them a substantial unearned income—a kind of welfare, if you will. Unsurprisingly, they slack off at once. Later, he withdraws the welfare and observes whether they work more or less than before welfare had ever been paid. The answer: the interlude on welfare makes very little difference.
This implies that your daughter should keep working for a while and see what happens. No harm will result. The only question for you is whether Kagel’s findings apply to your son-in-law.
Kagel’s subjects were rats. Do you think the parallel with your
son-in-law is close enough?
Yours experimentally,
The Undercover Economist
