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Work Norms and the Welfare State

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  • Giacomo Corneo

Abstract

Many European countries still provide their citizens with social insurance programs of unprecedented generosity. A cultural critique of the welfare state contends that generous social insurance has detrimental effects on work norms. This paper revisits the model of endogenous work ethic developed by Lindbeck and Nyberg (2006) and explores survey evidence on the relationship between social spending and pro-work attitudes. Both theoretical and empirical support of the cultural critique to the welfare state are found to be fragile. Furthermore, the empirical relationship between individual work ethic and individual income is shown to be non-monotonic, suggesting that weaker work norms needs not harm economic performance.

Suggested Citation

  • Giacomo Corneo, 2011. "Work Norms and the Welfare State," CESifo Working Paper Series 3665, CESifo.
    • Handle: RePEc:ces:ceswps:_3665
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    References listed on IDEAS

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    1. Assar Lindbeck & Sten Nyberg & Jörgen W. Weibull, 1999. "Social Norms and Economic Incentives in the Welfare State," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 1-35.
    2. Martin Halla & Mario Lackner & Friedrich G. Schneider, 2010. "An Empirical Analysis of the Dynamics of the Welfare State: The Case of Benefit Morale," Kyklos, Wiley Blackwell, vol. 63(1), pages 55-74, February.
    3. Assar Lindbeck & Sten Nyberg, 2006. "Raising Children to Work Hard: Altruism, Work Norms, and Social Insurance," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(4), pages 1473-1503.
    4. Friedrich Heinemann, 2008. "Is the Welfare State Self‐Destructive? A Study of Government Benefit Morale," Kyklos, Wiley Blackwell, vol. 61(2), pages 237-257, May.
    5. Gradstein, Mark, 2010. "Social Insurance, Education, and Work Ethics," CEPR Discussion Papers 7838, C.E.P.R. Discussion Papers.
    6. Assar Lindbeck & Sten Nyberg & Jörgen W. Weibull, 2003. "Social Norms and Welfare State Dynamics," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 533-542, 04/05.
    7. Steven Haider & Gary Solon, 2006. "Life-Cycle Variation in the Association between Current and Lifetime Earnings," American Economic Review, American Economic Association, vol. 96(4), pages 1308-1320, September.
    8. George A. Akerlof, 1980. "A Theory of Social Custom, of which Unemployment may be One Consequence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(4), pages 749-775.
    9. repec:bla:revinw:v:39:y:1993:i:4:p:377-86 is not listed on IDEAS
    10. Lindbeck, Assar, 1995. "Hazardous Welfare-State Dynamics," American Economic Review, American Economic Association, vol. 85(2), pages 9-15, May.
    11. repec:hhs:iuiwop:557 is not listed on IDEAS
    12. Lindbeck, Assar, 1997. "Incentives and Social Norms in Household Behavior," American Economic Review, American Economic Association, vol. 87(2), pages 370-377, May.
    13. Sendhil Mullainathan & Marianne Bertrand, 2001. "Do People Mean What They Say? Implications for Subjective Survey Data," American Economic Review, American Economic Association, vol. 91(2), pages 67-72, May.
    14. Corneo Giacomo, 2011. "Stakeholding as a New Development Strategy for Saudi Arabia," Review of Middle East Economics and Finance, De Gruyter, vol. 7(1), pages 1-19, May.
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    Citations

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    Cited by:

    1. Tammi, Timo, 2013. "Dictator game giving and norms of redistribution: Does giving in the dictator game parallel with the supporting of income redistribution in the field?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 43(C), pages 44-48.
    2. Corneo, Giacomo, 2013. "Work norms, social insurance and the allocation of talent," Journal of Public Economics, Elsevier, vol. 107(C), pages 79-92.
    3. Furtado, Delia & Papps, Kerry L. & Theodoropoulos, Nikolaos, 2022. "Who Goes on Disability when Times are Tough? The Role of Work Norms among Immigrants," European Economic Review, Elsevier, vol. 143(C).
    4. Schnellenbach, Jan & Schubert, Christian, 2015. "Behavioral political economy: A survey," European Journal of Political Economy, Elsevier, vol. 40(PB), pages 395-417.
    5. Giacomo Corneo & Frank Neher, 2014. "Income inequality and self-reported values," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(1), pages 49-71, March.
    6. Schnellenbach, Jan & Schubert, Christian, 2014. "Behavioral public choice: A survey," Freiburg Discussion Papers on Constitutional Economics 14/03, Walter Eucken Institut e.V..
    7. Corneo, Giacomo, 2012. "Social insurance, work norms, and the allocation of talent," CEPR Discussion Papers 9028, C.E.P.R. Discussion Papers.
    8. Hansen, Kerstin F. & Stutzer, Alois, 2021. "Experiencing Booms and Busts in the Welfare State and Support for Redistribution," IZA Discussion Papers 14327, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    welfare state; work ethic; symbolic values; social insurance;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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