WelGain

Tangible Welfare Costs & Hidden Welfare Gains: Unveiling the Counterfactual in the Evaluation of Social Programs

WelGain

The WelGain project examines why the public debate about welfare often focuses more on costs than on benefits. This imbalance, known as visibility bias, arises because the fiscal expenses of welfare programs are easy to see and discuss, while many of their positive effects remain hidden. For example, improvements in health, social inclusion, and long-term self-sufficiency are rarely captured in standard economic evaluations.

Our goal is to develop a framework that helps researchers and policymakers measure both the visible and the less visible gains of welfare programs. We combine theory and data to assess how social policies contribute to sustainable welfare systems—both economically and socially.

The project analyzes two major Norwegian reforms. The first is the 2017 rule requiring people who receive social assistance to participate in activation programs. The second is the 2020 reform that allowed refugees to live in ordinary housing rather than in reception centers. Using data from Norwegian municipalities, we compare outcomes in areas that implemented these reforms with those that did not. This approach allows us to estimate what would have happened without the policy—what economists call a “counterfactual.”

Finally, we investigate whether people’s attitudes toward welfare change when they are informed about the hidden, long-term benefits of such programs. Through a survey experiment, we test whether information about these gains can reduce welfare chauvinism—the belief that immigrants should have limited access to social support.

By highlighting both costs and benefits, WelGain aims to promote a more balanced understanding of welfare policy and contribute to a public debate that values social inclusion and long-term sustainability.