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Work Norms, Social Insurance and the Allocation of Talent

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  • Corneo, Giacomo

Abstract

This paper challanges the view that weak work norms in generous welfare states makes them economically unsustainable. I develop a dynamic model of family-transmitted values that has a laissez-faire equilibrium with strong work norms coexisting with a social-insurance equilibrium with weak work norms. While the former has better incentives, the latter induces more intergenerational occupational mobility which improves the allocation of talent and fuels growth. Strong work norms arise as a defensive strategy of parents that aims at perpetuating their occupation along family lines. I present evidence from microdata showing that generous social insurance correlates with high intergenerational occupational mobility and that more mobile individuals endorse weaker work norms.

Suggested Citation

  • Corneo, Giacomo, 2013. "Work Norms, Social Insurance and the Allocation of Talent," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 405, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    • Handle: RePEc:trf:wpaper:405
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    1. Corneo, Giacomo, 2013. "Work norms, social insurance and the allocation of talent," Journal of Public Economics, Elsevier, vol. 107(C), pages 79-92.
    2. Juan D. Barón & Deborah A. Cobb‐Clark & Nisvan Erkal, 2015. "Welfare receipt and the intergenerational transmission of work‐welfare norms," Southern Economic Journal, John Wiley & Sons, vol. 82(1), pages 208-234, July.
    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. Pierre Cahuc & Yann Algan, 2009. "Civic Virtue and Labor Market Institutions," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 111-145, January.
    5. repec:hal:spmain:info:hdl:2441/8812 is not listed on IDEAS
    6. Guido Neidhöfer, 2019. "Intergenerational mobility and the rise and fall of inequality: Lessons from Latin America," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 17(4), pages 499-520, December.
    7. Pierre Cahuc & Yann Algan, 2009. "Civic Virtue and Labor Market Institutions," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(1), pages 111-145, January.

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    More about this item

    Keywords

    work norms; unemployment insurance; occupational mobility; economic growth;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General
    • Z1 - Other Special Topics - - Cultural Economics

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